Your U.S.-based company is selling parts to a company in Chile and the company will pay you US$10,000 in 3 months. The current exchange rate is 490 pesos/US$. If the exchange rate at the time of payment is 510 pesos/US$
A) you earn additional profit.
B) the Chilean company will end up paying more for the goods.
C) the Chilean company will end up paying less for the goods.
D) you earn less profit.
B
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The BP curve is upward sloping if assets are perfectly substitutable
Indicate whether the statement is true or false
Investment occurs when:
a. firms are very profitable and have lots of extra cash on hand. b. there is a reduction in risk-aversion. c. the expected real interest rate is less than the expected real return on the investment project. d. individuals realize that there are greater long-term gains in the equity and credit markets.
Which of the following is NOT a deficit item on the international accounts balance sheet for a country?
A. imports of merchandise B. purchases of foreign currency C. exports of merchandise D. military spending abroad
Refer to the diagrams. Assuming a constant price level, an increase in aggregate expenditures from AE 1 to AE 2 would:
A. move the economy from A to C along AD 1 .
B. move the economy from C to A along AD 1 .
C. increase aggregate demand from AD 1 to AD 2 .
D. decrease aggregate demand from AD 2 to AD 1 .