Empirical evidence suggests that economies of scale, advertising and image differentiation, and risk spreading all help account for the large-scale production that exists in many sectors of the economy
Indicate whether the statement is true or false
TRUE
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An expansionary monetary policy causes interest rates to _____________________, and eventually United States net exports ____________ causing the AD curve to shift to the ___________________
A) fall; rise; right B) fall; fall; left C) rise; rise; right D) rise; fall; left E) rise; rise; left
The replacement of older products by newer improved ones is called
What will be an ideal response?
If borrowers and lenders expect a higher rate of inflation,
A. nominal interest rates should decrease. B. nominal interest rates should remain constant. C. nominal interest rates should increase. D. real interest rates should increase.
Assume that the current spot exchange rate is $1.98/£, that the three-month forward exchange rate is $2.00/£, and that a speculator believes that the spot rate in three months will be $2.05/£. How can this person speculate in the forward market? Also assume that the speculator is willing to take a position of about $20 million or £10 million. How much will the speculator earn if he or she is correct?
What will be an ideal response?