What do points A, B, and C have in common?
a. They all represent the effect of inflation.
b. They all represent the effect of changing interest rates.
c. They are all roughly equal.
d. They are all equilibrium points.
d. They are all equilibrium points.
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Why do investors hedge using futures contracts?
A) they are seeking to increase liquidity B) they are willing to pay for a reduction in risk C) in order to provide a counterparty to speculators D) they are more flexible than forward contracts
In the new classical model, an unanticipated increase in the money stock would cause
a. the price level and the level of real output to rise. b. the price level to rise with no effect on real output. c. real output to rise with no effect on the price level. d. no change in the price level or level of real output.
If consumer tastes are changing more in favor of the consumption of a particular good the:
a. market demand curve will shift to the left. b. consumer will move up a given demand curve, decreasing the quantity demanded. c. consumer would move down a given demand curve, decreasing the quantity demanded. d. consumer would move down a given demand curve, increasing the quantity demanded. e. market demand curve would shift to the right.
The money we pay for a good or service
a. generally exceeds its opportunity cost. b. generally equals its opportunity cost. c. has no part in determining its opportunity cost. d. generally equals two-thirds of its opportunity cost. e. generally is only part of its opportunity cost.