The Below Table Shows the Average Utility (In Utils) Obtained

question 13

Multiple Choice

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3

-The equimarginal principle illustrates:

• A)that consumers are essentially robots.
• B)that people behave irrationally.
• C)that people behave in rather consistent ways in order to maximize happiness.
• D)that people behave in rather inconsistent ways.
• E)that people will spend all their incomes.

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Definitions:

Uncovered Interest Parity

A financial theory stating that the difference in interest rates between two countries is equal to the expected change in exchange rates between those countries' currencies.

Forward Exchange Rate

The rate agreed upon for exchanging one currency for another at a future date.

Spot Exchange Rate

The immediate rate at which one can purchase or sell currency for on-the-spot delivery.

London Interbank Offer Rate

LIBOR; a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.