If business opportunities in a country become relatively less attractive relative to those of other countries, then
a. both its net exports and net capital outflows fall.
b. both its net exports and net capital outflows rise.
c. its net exports fall and its net capital outflows fall.
d. its net exports rise and its net capital outflows fall
b
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As price increases, additional suppliers are willing to produce a commodity.
Answer the following statement true (T) or false (F)
Suppose the exchange rates between the United States and Canada are in long-run equilibrium as defined by the idea of purchasing power parity. If the law of one price holds perfectly, then differences between U.S
and Canadian rates of inflation would A) have no effect on nominal exchange rates. B) be completely offset by changes in the real exchange rate. C) be completely offset by changes in the nominal exchange rate. D) violate the conditions for the law of one price. E) lead to a change in the real purchasing power of each country's currency when it is converted to the other country's currency.
Fixed costs are defined as
a. the total costs of a firm's production b. the additional cost of the last unit produced c. costs that increase proportionately as the quantity produced increases d. costs that do not vary as quantity produced increases e. implicit costs only
The optimal combination of goods for a consumer to purchase is shown by
a. any intersection of the indifference curve and the budget line. b. the point where the budget line touches the vertical axis. c. a point of tangency between the budget line and the indifference curve. d. the point at which the indifference curve parallels the horizontal axis. e. the intersection of two indifference curves.