Explain how each of the following might make use of the futures market. (a) A lender who is worried that its cost of funds might rise during the term of a loan it has made (b) A speculator who believes strongly that interest rates will rise
What will be an ideal response?
(a) The lender could hedge the risk by selling futures contracts on Treasury bills.
(b) The speculator could buy futures contracts on Treasury bills.
Economics
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The IS curve shifts to the right where there is
A) an increase in current taxes. B) a reduction in expected future taxes. C) a reduction in expected future output. D) all of the above E) none of the above
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The largest single expenditure component of GDP is: a. consumption
b. investment. c. government purchases. d. net exports.
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