Consider the economies of Kimberlei and Clarkistan, which are identical except that the multiplier in Kimberlei is smaller than that in Clarkistan.

This means that Kimberlei's GDP is Clarkistan's GDP to fluctuations in the components of total spending.

A) less sensitive than

B) equally sensitive as

C) more sensitive than

Features of the economy that reduce its sensitivity to shocks are called automatic stabilizers.

Suppose again that the economies of Kimberlei and Clarkistan are identical except that Kimberlei has instituted personal income tax, whereas Clarkistan hasn't.

Clarkistan's economy is (more, less) sensititve to fluctuations in GDP than Kimberlei's economy. This is because the personal income tax has ( increaes or reduced) kimerleis multiplier.

Profits from using currency options and futures.on july 2, the two-month futures rate of the mexican peso contained a 2 percent discount (unannualized). there was a call option on pesos with an exercise price that was equal to the spot rate. there was also a put option on pesos with an exercise price equal to the spot rate. the premium on each of these options was 3 percent of the spot rate at that time. on september 2, the option expired. go to the oanda.com website (or any site that has foreign exchange rate quotations) and determine the direct quote of the mexican peso. you exercised the option on this date if it was feasible to do so. a. what was your net profit per unit if you had purchased the call option? b. what was your net profit per unit if you had purchased the put option? c. what was your net profit per unit if you had purchased a futures contract on july 2 that had a settlement date of september 2? d. what was your net profit per unit if you sold a futures contract on july 2 that had a settlement date of september 2