Balance of payments crises under fixed exchange rates occur because of
A) government policies that are inconsistent with fixed exchange rates.
B) punitive currency wars.
C) global inflation and trade imbalances due to war.
D) excessive exports and imports that overload the global system.
E) monotonic expansion in global currency volume.
A
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Would you rather receive $100 in eight years paying an interest rate of 10% or be given 48 dollars today?
A) I would rather receive 48 dollar today. B) I would rather receive $100 in eight years. C) I am indifferent between the two options. D) I cannot determine which I would prefer.
Sarah buys little stuffed animals for $5 each. They come in different varieties. If the producer stops making (retires) a certain variety, a stuffed animal of that variety will be worth $100; otherwise it is worth $0
There is 25% chance that any variety will be retired. For the purchase of an individual animal, what is the value to Sarah of knowing ahead of time whether or not that variety will be retired?