Which of the following financial instruments provides a buyer the right (but not the obligation) to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a few years?
A. Currency option
B. Letter of credit
C. Currency swap
D. Forward contract
Answer: A
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All of the following are programs that redistribute income by making direct payments to people in the lower part of the income distribution EXCEPT
A) social security programs. B) welfare programs. C) Individual Retirement Accounts. D) unemployment compensation.
The law of comparative advantage explains which of the following?
What will be an ideal response?
An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. ________ has the comparative advantage in computers and ________ has the comparative advantage in shirts.
A. Ricardo; Paula B. Paula; Ricardo C. Paula; Paula D. Ricardo; Ricardo
A recessionary gap exists when
A. real GDP exceeds nominal GDP. B. nominal GDP exceeds real GDP. C. real GDP exceeds potential GDP. D. potential GDP exceeds real GDP.