Adaptive expectations are formed ________
A) from experience
B) from best guesses about the future
C) as new information becomes available
D) as a weighted average of expert forecasts
A
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Refer to Scenario 12.2. Explain why the situation described in the scenario is neither a prisoner's dilemma nor a battle of the sexes
What will be an ideal response?
A market transaction causes an externality if someone
a. directly involved in the transaction receives uncompensated benefits or costs from it. b. not directly involved in the transaction receives uncompensated benefits or costs from it. c. directly involved in the transaction seeks legal assistance to ensure that the transaction is carried out. d. not directly involved in the transaction interferes in it by imposing regulations or product standards.
Figure 17-10
Refer to . With the tariff, the domestic price and domestic quantity demanded are
a.
P1 and Q1.
b.
P1 and Q4.
c.
P2 and Q2.
d.
P2 and Q3.
The principal in an interest rate swap is:
A. is not borrowed, lent, or exchanged. It just serves as the basis for the calculation of cash flows. B. is usually held by a clearinghouse to guarantee payment. C. always transferred from the originator to the counterparty of the swap. D. usually borrowed from a third party.