Which of the following statements would be true for an economy that can be characterized as being to the right of its LM curve?
A) There is excess supply of money.
B) There is excess demand for money.
C) There will be a tendency for the level of output to increase.
D) There will be a tendency for the interest rate to decrease.
B
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If the current cash price is $8.80/bushel, storage costs are $0.15/bushel, August futures are currently trading at$9.20/bushel, and you expect the basis in July to be $0.20/bushel under August, then your expected profits from storing until July would be:
A. $0.05/bushel B. $-0.35/bushel C. $0.35/bushel D. $-0.05/bushel
Frank is considering moving to Denver. There is a 70 percent chance that he will find a job that pays $1,000 more than what he currently earns and a 30 percent chance he will find one that pays $3,000 less. The expected value of moving to Denver is:
A. $200. B. -$200. C. $700. D. $900.