Those who simultaneously buy and sell currency to take advantage of exchange rate differences are called
a. speculators
b. hedgers
c. entrepreneurs
d. arbitrageurs
e. underwriters
D
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Which of the following will not shift the demand for labor to the right?
A. an increase in the wage rate B. an increase in the demand for output C. an increase in the price of a competing input D. an increase in the competitiveness of an industry
Proponents of cuts in income tax rates argue that when income tax rates are cut, workers have an incentive to increase their work hours. This argument is based on the assumption that
A) workers are irrational. B) workers make decisions based on the marginal benefit of each hour worked compared to the marginal cost of work. C) the opportunity cost of working is negative. D) the marginal cost of each additional work hour is not important to most workers. E) workers make decisions based on the social interest.
Strategic currency stabilization:
A. involves frequent exchange rate intervention. B. is successful only if the government does not attempt to affect market expectations. C. can be successful only if governments possess large amounts of official reserves. D. involves carefully-timed exchange rate intervention.
People differ on the method by which stock should be valued. Some people are chartists, others behavioralists. The basic difference between these groups is:
A. chartists study charts of stock prices; behavioralists focus on investor psychology and behavior. B. chartists rely on astrological charts to predict stock values, behavioralists rely on psychology. C. behavioralists are finance based, chartists study charts of investor psychology. D. chartists and behavioralists are the same in their approach; essentially there aren't any differences.