For this question, assume that the domestic interest rate is 8% and that the foreign interest rate is 6%. And finally, assume that the domestic currency is expected to depreciate by 3% during the coming year. Given this information, we know that
A) individuals will only hold domestic bonds.
B) individuals will only hold foreign bonds.
C) individuals will be indifferent about holding domestic or foreign bonds.
D) the interest parity condition holds.
B
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In April, market analysts predict that the price of titanium will fall in May. What happens in the titanium market in April, holding everything else constant?
A) The quantity demanded and the quantity supplied increase. B) The supply curve shifts to the right. C) The supply curve shifts to the left. D) The demand curve shifts to the right.
Suppose the state legislature in your state imposes a state licensing fee of $100 per year to be paid by all firms that file state tax revenue reports. This new business tax:
A) increases marginal cost. B) decreases marginal cost. C) increases marginal revenue. D) decreases marginal revenue. E) none of the above
Which of the following is not a major role of financial institutions?
a) It seeks to minimize interest rates that it pays to savers. b) It seeks to diversify assets to reduce risk. c) It seeks to minimize transaction costs. d) It seeks to minimize information costs.
If the monopoly illustrated in the figure above could engage in perfect price discrimination, then the lowest ticket price would be
A) $1.00. B) $2.00. C) $3.00. D) $3.50.