The interest parity condition indicates that the interest differential is equal to the
A) risk premium.
B) forward premium.
C) futures premium.
D) arbitrage premium.
B
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According to an article in the Wall Street Journal, unlike airlines, even elite hotels don't have sophisticated systems that can react quickly to changes in demand. Even if they could, many hoteliers say people don't respond that much to lower rates
"We've tested this, cutting our rates by $50 [per night], and we didn't see an appreciable response in occupancy," says Jim Schultenover, a vice president for Ritz-Carlton. Source: Jesse Drucker, "In Times of Belt-Tightening, We Seek Reasonable Rates," Wall Street Journal, April 6, 2001. Based on the information above, the demand for hotel rooms is A) perfectly elastic. B) inelastic. C) unit elastic. D) elastic.
The demand curve for a good connects points describing how much consumers
a. actually bought at different prices during a particular period. b. actually bought at different prices in different periods. c. would have been willing and able to buy at different prices during a particular period. d. would have been willing and able to buy at different prices in different periods.
A positive externality arises in a situation where a third party, who is not part of a market transaction, _____
a. fails to allocate resources efficiently b. suffers from a market transaction by others c. benefits from a market transaction by others d. pays a pollution tax to balance social costs
Refer to the above figure. Which panel is consistent with the Fed selling bonds?
A. Panel A B. Panel B C. Panel C D. Panel D