Which of the Following Is not Considered a Highly Liquid

question 25

Multiple Choice

Which of the following is not considered a highly liquid asset?

• A) Federal funds sold
• B) 90-day Treasury bills
• C) AAA-rated commercial paper
• D) A Federal Home Loan Bank Board bond with 6 months until maturity
• E) Repurchase agreement

Identify conditions under which a firm experiences economies of scale, constant returns to scale, and diseconomies of scale based on total cost patterns.

Comprehend the difference between rising, falling, and constant long-run average total costs.

Recognize the role of specialization in achieving economies of scale.

Understand the difference between marginal cost, average total cost, and marginal product in the context of production and cost functions.

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Definitions:

Nominal Rate

The interest rate before adjustments for inflation; essentially, the face value rate of interest.

Inflation

How fast the general price index for merchandise and services escalates, corroding the purchasing strength.

Spot Rate

The current market price of a currency, security, or commodity available for immediate delivery.

Interest Rate Parity

A theory asserting that the difference between the interest rates of two countries is equal to the difference between the forward exchange rate and spot exchange rate.