Holding all else constant, a decrease in the real interest rate on Mexican assets will ________ the supply of dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. increase; decrease
B. decrease; increase
C. increase; increase
D. decrease; decrease
Answer: B
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Suppose that at a bicycle shop, instead of having each worker assemble an entire bicycle themselves, one person welds the frames, another person works on the braking system, another person works on the tires, and another person works on the gears
This best demonstrates the concept of A) division of labor. B) microeconomics. C) comparative advantage. D) absolute advantage.
If the marginal propensity to consume is 0.60, the marginal propensity to save will be: a. greater than 0.60. b. equal to 0.40
c. equal to 0.60. d. equal to 0.
Build-Right Concrete Products produces specialty cement used in construction of highways. Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form:Q = aPbMc
where Q = yards of cement demanded monthly, P = the price of Build-Right's cement per yard, M = state tax revenues per capita, and PR = the price of asphalt per yard. The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation. The estimation results are presented below: 
height="198" width="577" />Given the above, if tax revenue per capita (M) increases 5%, the estimated quantity of cement demanded will A. increase more than 1% but less than 5%. B. increase more than 5% but less than 10%. C. increase by less than 1%. D. increase more than 10%.
The difference in values between money today and money in the future is lower when the rate of interest is higher.
Answer the following statement true (T) or false (F)