Suppose the economy has a recessionary ga
A) raise real GDP without increasing the price level.
B) raise real GDP and the price level.
C) raise the price level alone, but cannot increase real GDP.
D) raise real GDP and decrease the price level.
B
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Since foreign credit dries up in crises when it is most needed, developing countries can protect themselves from default by
A) cutting off imports of goods. B) allowing the exchange rate to float. C) using equity finance only. D) accumulating high levels of international reserves. E) avoiding the international capital market.
Which of the following is an advantage of hedging with options instead of forward contracts?
A) Options prices tend to be lower than forward prices. B) If the price moves in the opposite direction to the one hedged against, the hedger can decline to exercise the option and limit the loss to what was paid for the option. C) If the price moves in the direction of the one hedged against, the hedger can decline to exercise the option and limit the loss to what was paid for the option. D) Options allow investors to purchase a forward contract at a later date.
If aggregate output is below its equilibrium level ________
A) there is an excess demand for goods B) actual output is below planned expenditure C) firms will tend to replenish their low inventories driving output up toward equilibrium D) all of the above E) none of the above
Arrange the following goods from least to most elastic, explaining your ordering: gasoline, Exxon gas, Exxon gas at a particular gas station