Refer to Figure 5-1. The market equilibrium price is
A) $60. B) $50. C) $40. D) < $40.
C
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An investment opportunity has two possible outcomes, and the value of the investment opportunity is $250. One outcome yields a $100 payoff and has a probability of 0.25. What is the probability of the other outcome?
A) 0 B) 0.25 C) 0.5 D) 0.75 E) 1.0
An association of producers such as OPEC that agrees to set common pricing or output goals is referred to as a
A) cartel. B) conglomerate. C) monopoly. D) partnership.
Money fails to act as a store of value when:
a. it is no longer backed by gold. b. the inflation rate is very high. c. the goods produced in an economy are indivisible. d. the economy goes into a recession. e. coins are replaced by paper money.
The interest rate that a commercial bank pays when it borrows from the Fed is the __________ rate
A) discount B) exchange C) federal D) bank