Traders working for banks are subject to the
A) principal-agent problem.
B) free-rider problem.
C) double-jeopardy problem.
D) exchange-risk problem.
A
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Use the following table with data for a private closed economy (an economy with only a private sector and no international trade) to answer the next question. All figures are in billions of dollars.Expected Rate of ReturnInvestmentConsumptionGDP10%$0$400$4008100500600620060080043007001,00024008001,20005009001,400If the real rate of interest is 2%, then the equilibrium level of real GDP will be
A. $800 billion. B. $1,200 billion. C. $1,400 billion. D. $1,000 billion.
The quantity theory of money implies that over the long run, the inflation rate will ________
A) equal the nominal interest rate B) equal the growth rate of M2 minus the growth rate of real output C) equal the growth rate of M2 plus the growth rate of real output D) equal the velocity of money
If a monopolistically competitive seller's marginal cost is $3.56, the firm will not change its output if
A) its marginal revenue is less than $3.56. B) its marginal revenue is equal to $3.56. C) its marginal revenue is more than $3.56. D) its average total cost is equal to $3.56. E) Both answers B and D are correct.
A dirty float is an example of ________
A) a fixed exchange rate system B) a flexible exchange rate system C) a revaluation D) a currency board