Which of the following is the most likely response to a decrease in the U.S. real interest rate?
a. a U.S. company decides to expand its factory
b. a U.S. citizen decides to purchase fewer foreign bonds
c. a German mutual fund decides to increase its deposits at a U.S. bank
d. All of the above are consistent.
a
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For most products, purchases tend to fall with decreases in consumers' incomes. Such products are known as
A. average goods. B. inferior goods. C. direct goods. D. normal goods.
In the capital and financial account, the largest category of international transactions is
A) statistical discrepancy. B) net transfers. C) net interest. D) exports and imports. E) foreign investment in the United States.
Grace Makutsi finally bought a pair of blue shoes that she had been coveting for a long time. In less than a week she discovered that the shoes were uncomfortable. Grace went back to wearing her old pair and stashed away the new pair. When asked by her
boss, Mme. Ramotswe, why does she not simply give away the new pair, she said: "But I paid so much for them." Grace's behavior A) is rational: she should not discard a valuable item. B) ignores the fact that the purchase price is now a sunk cost and has no bearing on whether she should give them away or not. C) supports the endowment effect which states that ownership of an item makes it more valuable. D) is rational because the more you pay for an item the more valuable it is.
A competitive firm's supply curve is identical to its marginal cost curve
Indicate whether the statement is true or false