Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
If this economy was entirely closed to international trade, equilibrium price and quantity would be
A. Pa and x.
B. Pc and z.
C. Pa and z.
D. Pc and v.
Answer: A
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When Americans or foreigners expect the return on ________ assets to be high relative to the return on ________ assets, there is a higher demand for dollar assets and a correspondingly lower demand for foreign assets
A) dollar; dollar B) dollar; foreign C) foreign; dollar D) foreign; foreign
How does a change in quantity supplied differ from a change in supply?
A) A change in quantity supplied shifts the supply curve; a change in supply is a movement along the curve. B) A change in one of the ceteris paribus conditions affects quantity supplied, not supply. C) A change in the price affects quantity supplied, not supply. D) There is no difference.
For some investors, derivatives can be attractive financial assets to purchase because
A. these assets can be used to offset the possibility of another risk faced by the investor. B. these assets allow an investor to eliminate the risk that they face entirely. C. they provide high returns with a very small investment. D. they are easier to sell than common stock.
The present value of a dollar rises as
A. the interest rate declines and the number of years you wait for your money declines. B. the interest rate rises and the number of years you wait for your money rises. C. the interest rate declines and the number of years you wait for your money rises. D. the interest rate rises and the number of years you wait for your money declines.