What are the two most important factors influencing investor preferences?
A. The desire for high rates of return and the thrill of uncertainty.
B. The desire for high rates of return and dislike of risk and uncertainty.
C. An equal balance between stocks and bonds, and high rates of return.
D. Stable rates of return and balance between private and public sector financial assets.
B. The desire for high rates of return and dislike of risk and uncertainty.
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If the consumption function is C = 25 + 0.9y and income increases by $100, then savings will increase by
A) $10. B) $25. C) $90. D) $115.
Which of the following is an example of a managed float?
a. The Fed buys or sells U.S. dollars in order to maintain a fixed $1.05 per euro exchange rate. b. The European Central Bank buys or sells euros in order to "peg" the price level. c. The Bank of England buys or sells British pounds in order to maintain a fixed exchange rate with the U.S. dollar. d. The Bank of Japan intervenes in the foreign exchange market to prevent a rapid depreciation of the yen. e. The Bank of Japan intervenes to set the tax rate very close to the tax rates of other countries.