The right to buy a given quantity of an underlying asset at a predetermined price on or before a specific date is called a(n):
A. option writer.
B. call option.
C. put option.
D. arbitrage contract.
Answer: B
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All of the following are surplus items in the balance of payments EXCEPT
A) purchases of foreign assets. B) exports of merchandise. C) foreign tourist expenditures. D) funds deposited in this country by foreign residents.
If a bookstore were having a half-price sale, instead of buying three books, you bought six. Because of the sale, your consumer surplus
A. declined. B. stayed the same. C. rose. D. doubled.
A higher wage could result in a lower labor cost per unit of output than a lower wage if the higher wage:
A. is accompanied by an offsetting decline in fringe benefits. B. increases supervision costs. C. reduces job turnover. D. increases worker absenteeism.
The effective return from a foreign investment is
A) the domestic interest rate plus the forward premium (discount). B) the foreign interest rate plus the forward premium (discount). C) the nominal interest rate minus inflation. D) the real interest rate.