When a financial institution hedges the interest-rate risk for a specific asset, the hedge is called a
A) macro hedge.
B) micro hedge.
C) cross hedge.
D) futures hedge.
B
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All of the following are forms of social regulation EXCEPT
A) the Food and Drug Administration regulating the quality of drugs. B) the Public Utility Commission regulating the price of telephone service. C) the Environmental Protection Association regulating automobile emissions. D) the Occupational Safety and Health Administration regulating workplace safety.
The difference in prices for first-class and coach airline tickets exemplifies price discrimination.
Answer the following statement true (T) or false (F)
The value of the deposit multiplier is 1 divided by the required reserve ratio
a. True b. False Indicate whether the statement is true or false
In a market where there are external or spillover costs associated with consumption and production, the equilibrium will not be efficient because:
A. price will be greater than MC. B. firms will shut down until costs are reduced. C. too many resources will be allocated to production of the good. D. costs of production will, on average, be too high.