How are daily gains and losses settled in the futures market?
A. Gains and losses are not realized until the party either accepts delivery or delivers the product at the end of the contract.
B. Through withdrawals and deposits in the owners' personal savings account.
C. Through withdrawals and deposits in the margin account.
D. Through direct cash transfers between the buyer and a seller of each contract.
Ans: C. Through withdrawals and deposits in the margin account.
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During Britain's brief alignment with the ERM from 1990-1992, the trilemma tells us that monetary policy authority no longer existed in Britain. Why?
A) Britain could print more pounds, but could not increase its gold stock. B) Britain kept monetary growth rates at zero. C) The British interest rate equaled the German rate to attain uncovered interest parity. D) The British could lower unemployment using other means such as fiscal policy.
If Spain is capable of producing either tapas or soccer balls or some combination of those two products, then Spain should:
A. trade only if it possesses the absolute advantage in the production of both goods. B. remain self-sufficient if it can produce both efficiently. C. produce the good it has an absolute advantage in producing. D. produce the good it has a comparative advantage in producing.
Identify a limitation of the aggregate expenditure model. Explain what is missing from the model that causes that limitation.
What will be an ideal response?
The utility of a good or service
A. is synonymous with usefulness. B. rarely varies from person to person. C. is the satisfaction or happiness one receives from consuming it. D. is easy to quantify.