An Economy That Does NOT Trade with the Rest of the World

question 35

Multiple Choice

An economy that does NOT trade with the rest of the world is a(n)

• A)open economy.
• B)command economy.
• C)trade economy.
• D)closed economy.

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Definitions:

Call Option

An agreement that gives an investor the right, but not the obligation, to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.

Stock Price

The cost of purchasing a share of a company, which can fluctuate based on market conditions and company performance.

Strike Price

The price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Hedge Ratio

The ratio of the size of a position in a hedging instrument to the size of the exposure it seeks to hedge.