Which of the Following Is an Argument Used by Keynes

question 10

Multiple Choice

Which of the following is an argument used by Keynes and Hicks?

• A) If hedgers hold long positions and speculators holds short positions, the futures price will tend to be higher than expected future spot prices
• B) If hedgers hold long positions and speculators holds short positions, the futures price will tend to be lower than expected future spot prices
• C) If hedgers hold long positions and speculators holds short positions, the futures price will tend to be lower than today's spot prices
• D) If hedgers hold long positions and speculators holds short positions, the futures price will tend to be higher than today's spot prices

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Definitions:

Marginal Product

The additional output that is produced by adding one more unit of a specific input, holding all other inputs constant.

Variable Input

An input whose quantity can be changed in the short term to adjust production levels, such as labor or raw materials.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit changes as production volume increases.

Profit-maximizing

Refers to a firm's goal of achieving the highest possible profit given its production costs and market conditions.