In late 2010 the National Bank of Australia offered a 4 percent interest rate on a savings account while Bank of America offered 2 percent. This difference means that
A) people expect the U.S. dollar to appreciate to 8 percent against the Australian dollar and interest rate parity to occur.
B) there will be a surplus of U.S. dollars in the foreign exchange market.
C) people expect the U.S. dollar to appreciate by 2 percent against the Australian dollar and interest rate parity to occur.
D) there will be a shortage of Australian dollars in the foreign exchange markets.
C
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What will be an ideal response?
The market supply curve is found by
A. plotting and summing up the supply curves of individual firms. B. plotting the supply curves of individual consumers. C. taking the supply curve of the representative firm. D. plotting the supply curves of individual firms.
The price elasticity of demand measures
A) changes in demand. B) how responsive market prices are to a change in demand. C) how responsive consumers are to a change in price. D) how responsive consumers are to a change in income.
Why can't a monopolistic competitor earn economic profits in the long run?
What will be an ideal response?