The development of new financial securities or investment strategies using sophisticated models is known as
A) underwriting.
B) factoring.
C) financial engineering.
D) hedging.
C
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Why do symmetric shocks not disturb fixed exchange rate systems?
A) Symmetric shocks happen only once and cause a one-time shift in interest rates. B) Symmetric shocks imply differences in rates of interest, which is irrelevant to fixed exchange rate systems. C) A demand shock can easily be dealt with using domestic policies that do not involve other nations. D) Symmetric shocks require the same medicine in both economies, so monetary policy will be in a direction to help both situations.
What will happen to profits and domestic prices when a quota is used to protect a domestic monopolist from international competition?
a. Profits will fall; domestic prices will fall. b. Profits will fall; domestic prices will rise. c. Profits will rise; domestic prices will rise. d. Profits will rise; domestic prices will fall.