Do you agree that currency depreciation will lead to an increase in the debt burden of the companies that borrow in foreign currency? Explain with an example.
What will be an ideal response?
Companies that borrow in foreign currency will see their debts increase whenever their currency values decline. For example, an Indonesian business that borrowed $1,000 in February 2009, when $1 was worth 8,574 rupiah, thought it owed 8.6 million rupiah. But when the dollar became worth 11,765 rupiah in May 2011, the company’s debt skyrocketed to 11.8 million rupiah.
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Increasing the wage rate will cause people to work more.
A. True B. False C. Uncertain
Heuristics economize on the mental capabilities of people
Indicate whether the statement is true or false
A sole proprietorship is characterized by:
a. separation of ownership and management. b. mutual agency. c. existence of multiple contracts. d. unlimited liability.
Is an efficient market allocation fair? Explain.
What will be an ideal response?