When There Are Too Few or Too Many Resources Going

question 86

Multiple Choice

When there are too few or too many resources going to an economic activity,

• A) a public good exists.
• B) a market failure exists.
• C) a regressive tax is in place.
• D) a free-rider problem exists.

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Definitions:

Spot Rate

The current exchange rate at which a currency can be bought or sold for immediate delivery.

Settlement Date

The date on which a trade is finalized, and the buyer must make payment and the seller deliver the asset.

Fair Value Hedge

A type of hedge that aims to offset changes in the fair value of an asset or liability or an unrecognized firm commitment.

Forward Contract

An agreement to buy or sell an asset at a future date at a price agreed upon today, often used to hedge against price movements.