g If a nation has a comparative advantage in the production of X, this means the nation Multiple Choice cannot benefit by producing and trading this product. must give up less of other goods than other nations in producing a unit of X. has a production possibilities curve identical to those of other nations. is not subject to increasing opportunity costs.

The treasurer for pittsburgh iron works wishes to use financial futures to hedge her interest rate exposure. she will sell five treasury futures contracts at $139,000 per contract. it is july and the contracts must be closed out in december of this year. long-term interest rates are currently 7.30 percent. if they increase to 9.50 percent, assume the value of the contracts will go down by 20 percent. also if interest rates do increase by 2.2 percent, assume the firm will have additional interest expense on its business loans and other commitments of $149,000. this expense, of course, will be separate from the futures contracts. a. what will be the profit or loss on the futures contract if interest rates increase to 9.50 percent by december when the contract is closed out

When the federal reserve buys and sells bonds to member banks, it is called a. monetary policy b. reserve ratio c. interest rate adjustment d. open market operations

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