If the interest rate is 7 percent on euro-denominated assets and 5 percent on dollar-denominated assets, and if the dollar is expected to appreciate at a 4 percent rate, the expected return on ________-denominated assets in terms of ________ percent
A) dollar; euros is 3
B) euro; dollars is 1
C) dollar; euros is 9
D) euro; dollars is 11
C
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The demand for dollars is downward sloping because when dollar appreciates,
a. Foreigners demand more US goods and services b. Foreigners demand fewer US goods and services c. Foreigners demand more dollars d. Foreigners do not change their demand for US goods and services
The shutdown point is between which of the following market prices?
a. below P1
b. P1 and P2
c. P2 and P3
d. P3 and P4
The following figure shows the free-trade production and consumption in Country Y. AB is the production-possibility curve of Country Y. I1 is the community indifference curve of Country Y. Country Y exports
A. seventy pounds of cheese. B. fifty gallons of wine. C. fifty pounds of cheese. D. ninety gallons of wine.
If exports and imports:
a. are imbalanced, then a trade surplus exists b. are imbalanced, then a trade deficit exists c. are equal, then trade is balanced d. are equal, then the economy is unhealthy