Assuming That the Economy Is Currently in a Long- Run

question 82

Multiple Choice

Assuming that the economy is currently in a long- run equilibrium with real GDP equal to Y^*, a positive AD shock (with no change in the money supply) will eventually result in

• A)a higher price level and GDP at its potential level.
• B)a lower price level and GDP at its potential level.
• C)an ongoing inflation in the economy.
• D)a lower price level and GDP below its potential level.
• E)no change in the price level.

Calculate the net position value in various scenarios when using options as hedging strategy.

Analyze the financial outcome of hedging strategies in response to stock price movements.

Recognize the implications of using options for tax planning and risk management.

Apply knowledge of call and put options pricing to make informed financial decisions.

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Definitions:

Service Charge

A fee collected for services rendered, typically added to a bill in sectors like banking, hospitality, or dining.

Interest

The cost of borrowing money or the return on investment, typically expressed as a percentage over a period of time.

Adjusted Cash Balance

The cash amount shown in a company's bank statement, adjusted for deposits in transit, outstanding checks, and bank errors.

Check Register

A personal record book or a digital log used to track checks written, deposits made, and current balance of a checking account.