If bank with $100 million in assets and $10 million in equity increases its assets by adding $1 to capital for every $1 added to assets:
A. the debt-to-equity ratio will remain constant.
B. the debt-to-equity ratio will increase.
C. the answer cannot be determined from the information in the question.
D. the debt-to-equity ratio will decrease.
Answer: D
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Answer the next question based on the demand and cost schedules for a monopolistically competitive firm given in the table below.PriceQuantity DemandedTotal CostOutput$201$101182202163293144364125405106426What output quantity will the monopolistically competitive firm produce to maximize profits?
A. 3 B. 5 C. 6 D. 2
Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's risk level rises relative to England and nothing else changes, then
a. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate. b. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing an appreciation of the Swiss franc. c. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market rises, causing an uncertain change in the value of the Swiss franc. d. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc. e. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc.
Suppose that real output is fixed and equal to 400, while velocity is fixed and equal to 5. Then, if the money supply is equal to 200, the price level will be:
A. 10. B. 7.5. C. 2.5. D. 5.
The European Central Bank has ensured independence by:
A. making sure the ECB's financial interests supports member countries' political organizations. B. not taking votes on policy matters. C. by appointing the Executive board members for life. D. explicitly forbidding the Governing Council from taking instructions from any government.