Suppose you are a U.S. exporter expecting to receive a payment of NZD1,000 (New Zealand dollars) in 12 months. The annual interest rate on NZD deposits is 5 percent, and the annual interest rate on dollar deposits is 9 percent. If the present exchange rate is $0.50 per NZD and interest rate parity holds, how many dollars do you expect to receive at the maturity date of the export contract?
a. $2,000
b. $1,923
c. $1,000
d. $580
e. $520
e
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Generally, if a nation imposes a tariff on imports,
a. part of the tax is paid by foreign exporters. b. the entire tax is paid by foreign exporters. c. none of the tax is paid by foreign exporters. d. the tax has no impact on the profits of foreign exporters.
The economy was expanding during all of the years that I was a student, but as soon as I graduated, the economy contracted. Therefore, the labor market was waiting until I started looking for a job to contract. This statement is an example of the
A. fallacy of inductive reasoning. B. fallacy of logic. C. post hoc, ergo propter hoc fallacy. D. ceteris paribus fallacy.
When an increase of a firm's scale of production leads to higher average costs per unit produced, there is an increasing return to scale.
Answer the following statement true (T) or false (F)
President Obama has proposed a goal that everyone complete at least one year of formal education or training beyond high school. This policy would
A) increase human capital and increase economic growth. B) increase physical capital and increase economic growth. C) increase financial capital and increase economic growth. D) eliminate opportunity costs and increase economic growth.