An exchange rate that has an officially fixed value less than than its fundamental or market equilibrium value is called a(n) ________ exchange rate.
A. devalued
B. undervalued
C. depreciated
D. overvalued
Answer: B
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Hedging by buying an option
A) limits gains. B) limits losses. C) limits gains and losses. D) has no limit on option premiums.
Migraine medicine increased in price by 6% causing a 1% increase in quantity supplied. Supply is
a. inelastic. b. elastic. c. unit elastic. d. elasticity.
In order to maximize utility, a consumer should allocate money income so that
A. the marginal utility obtained from the last dollar spent on each product is the same. B. the elasticity of demand on all products purchased is the same. C. the total utility derived from each product consumed is the same. D. the marginal utility of the last unit of each product consumed is greater than the total utility of each product consumed.
Which of the following instruments is not used by the Federal Reserve to change the money supply?
A. open market operations B. the federal tax code C. the required reserve ratio D. the discount rate