A nation's country-risk premium increases if:
a. Large corporations, on average, increase their debt-to-equity ratios, thereby making their operations more volatile.
b. Expected inflation becomes harder to predict.
c. The average maturity structure in the nation rises.
d. All of the above.
e. Central bank policies become more predictable.
.B
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Neoclassical economists believe that government policy should focus on creating a market-oriented environment that rewards________________.
a. importing b. exporting c. innovation d. production
A country has a comparative advantage in a good if
A. It can specialize only in two goods. B. It always has an absolute advantage in the production of the good. C. It can produce more of the good than another country. D. It can produce a good at a lower opportunity cost relative to another country.
Assume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the
resulting budget line: A. is 5. B. is 1/5. C. is 4. D. is 20.
Refer to the graph below for a purely competitive firm in the short run. The price of the firm's product is given by:
A. 0F/0C
B. 0G/0C
C. 0F/0B
D. 0E/0A