You can either invest in project A or B. Project A could have a value of $150 with a probability of 0.1 or a value of $75 with probability 0.9 . Project B could have a value of $120 with probability 0.2 or a value of $75 with a probability of 0.8 . Which project should you invest in?
a. Project A
b. Project B
c. Neither of the projects
d. You cannot tell from the information presented
b
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A higher interest rate will:
a. shift the consumption function upward b. shift the consumption function downward. c. make the consumption function steeper. d. make the consumption function flatter. e. cause an upward movement along the consumption function.
The figure below illustrates the market for British pounds. D£ and S£ are the nonofficial demand and supply curves of the British pounds, respectively.
If the British government wants to peg the dollar per pound exchange rate at $2.50 per pound, what action would British monetary authorities have to undertake?
A. Buy 1 million pounds and sell 1 million dollars B. Sell 1 million pounds and buy 2.5 million dollars C. Buy 1 million pounds and sell 2.5 million dollars D. Buy 6 million pounds and sell 12 million dollars