Relative to a fixed franchise fee, sharing contacts in franchising
a. Can decrease shirking
b. Can increase shirking
c. Always decreases shirking
d. None of the above
b
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When the Fed eases U.S. monetary policy, domestic interest rates ________, making U.S. assets relatively less attractive to foreign investors, and ________ the equilibrium exchange rate.
A. rise; increasing B. fall; decreasing C. fall; increasing D. rise; decreasing
If there are a large number of firms in a monopolistically competitive industry
A) long-run profit will be equal to zero. B) the country in which the firms are located can be expected to export the goods they produce. C) there will be barriers to entry that prevent addition firms from entering the industry. D) the firms will converge production on a standardized product. E) there will be a small number of firms that are very large and the rest will be very small.
The long-run cumulative dynamic multiplier
A) cannot be calculated since in the long-run, we are all dead. B) is the sum of all individual dynamic multipliers. C) is the coefficient on Xt-r in the standard formulation of the distributed lag model. D) is the difference between the coefficient on Xt-1 and Xt-r.
Assume that the interest parity condition holds. Also assume that the U.S. interest rate is 6% while the U.K. interest rate is 8%. Given this information, financial markets expect the pound to
A) depreciate by 14%. B) depreciate by 2%. C) appreciate by 2%. D) appreciate by 6%. E) appreciate by 14%.