A speculator who believes strongly that interest rates will rise would be likely to
A) buy futures contracts on Treasury bills.
B) sell futures contracts on Treasury bills.
C) buy Treasury bonds in the spot market.
D) increase now the amount of money which he lends.
A
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The importance of the ceteris paribus assumption is that it: a. allows one to separate normative economic issues from positive economic ones
b. allows one to generalize from the whole to the individual. c. allows one to analyze the relationship between two variables apart from the influence of other variables. d. allows one to hold all variables constant so the economy can be carefully observed in a suspended state.
Costume jewelry is produced in a monopolistically competitive market. One producer produces 700 necklaces and at that output level, MR = MC = $3 . We know then that
a. the price is $3 b. economic profit is $2,100 c. the price is higher than $3 d. new firms will enter the market e. the firms should produce the 700 necklaces in the short run, but shut down in the long run