It Has Been Argued That the Information Technology Age Has

question 117

Multiple Choice

It has been argued that the information technology age has greatly increased productivity and potential output.If this is true:

• A)The long-run real interest rate is also higher as a result
• B)Nominal long-run interest rates should have increased
• C)We should have seen lower short-run interest rates than we have seen
• D)The long-run real interest rate is lower as a result

Discuss cognitive strategies and their relevance in the information-processing model.

Understand the concept of market equilibrium and how it is established.

Comprehend the effects of price controls (ceilings and floors) on market equilibrium.

Recognize the outcomes of government intervention in the form of quotas and price controls and their impact on supply and demand.

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Definitions:

Hedger

An investor or trader who enters into contracts to protect against future price fluctuations of an asset.

Call Option

A Call Option is a financial contract that gives the holder the right, but not the obligation, to buy a specific amount of an asset at a predetermined price within a specified period.

Put Option

A financial deal that provides the holder the privilege, yet not the compulsion, to offload a specified quantity of a basic asset at a fixed rate within an established timeframe.

Underlying Asset

The financial instrument (such as stocks, bonds, commodities) upon which derivatives and other financial instruments are based.