When purchasing a future contract, the buyer of a futures contract:
A. must pay a set amount to the seller regardless of what the future price turns out to be.
B. assumes very little risk of the future price fluctuation of some asset.
C. agrees to pay the seller later where the payment is based on the future price of some asset.
D. none of these are true.
Answer: A
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Suppose Paul Allen deposits $1 million cash into his checking account at Bank of America. If the required reserve ratio is 20%, what is the maximum amount of required reserves that this deposit will generate in the banking system?
A) $1 million B) $4 million C) $5 million D) $25 million
Suppose that in a computer factory, if there is 1 worker, 80 computers are produced per week. If there are 2 workers, 150 computers are produced per week. If there are 3 workers, 210 computers are produced per week. Given this information, there
A) is diminishing marginal product. B) are too many workers. C) are not enough workers. D) is increasing marginal product.