An import-export business that finds itself in a "short" foreign-currency position risks a financial loss if
A. the foreign currency depreciates (more than expected).
B. the domestic currency depreciates (more than expected).
C. it pays attention to exchange-rate forecasts.
D. foreign demand for its product rises (more than expected).
Answer: B
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When dealing with negative externalities, government action is required
A) only if transactions cost are low. B) for any bargain to be successful. C) only in environmental disputes. D) only if transactions costs preclude bargaining between polluter and victim.
Buying a product in one market and reselling it in another market at a higher price is referred to as
A) arbitrage. B) purchasing power parity. C) crowding in. D) barter.
The primary reason most oligopolists do not become monopolists is
a. inadequate profit b. disinclination to merge c. fear of government d. inability to prevent competitors from entering the industry e. inability to differentiate their goods
Country A and country B both increase their capital stock by one unit. Output in country A increases by 12 while output in country B increases by 15 . Other things the same, diminishing returns implies that country A is
a. richer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units. b. richer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units. c. poorer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units. d. poorer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units.