If American demand for purchases of Mexican goods has increased, how would you expect the equilibrium exchange rate in the market for dollars to respond? Support your answer graphically
What will be an ideal response?
If Americans are demanding more Mexican goods, they must trade their dollars in the foreign exchange market for pesos. This increase in the supply of dollars is represented by the shift to the right of the supply curve for dollars below. As the supply of dollars increases, the equilibrium exchange rate falls (the dollar depreciates).
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If a price ceiling is set above the current market clearing price, then
A) a surplus must immediately occur. B) a shortage must immediately occur. C) there will be incentives for black markets to develop. D) quantity demanded will remain equal to quantity supplied at the current market clearing price.
Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company. Assume an interest rate of 5%. Which project has the highest NPV?
A. Project A
B. Project B
C. Project C
D. It cannot be determined from the information given.
Two goods that are complementary are
a. wrapping paper and scotch tape b. letter and fax c. beef and chicken d. bicycle and motorcycle e. Coke and Pepsi
Which of the following represents the marginal productivity theory of income distribution?
a. Workers receive wages and benefits equal to their contribution to output. b. Capital owners are rich because they take the most income from output. c. Land owners receive an increased share of income because of property rights. d. Workers, land owners, and capital owners all receive equal shares of income.