A sign that Country A is under pressure to appreciate its currency is its:
a. Current account is in surplus.
b. Reserves account is in surplus (i.e., positive).
c. Overall balance is in deficit.
d. Overall balance is in surplus.
e. All of the above.
.D
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A strategy that limits defection in a repeated prisoner's dilemma game is:
A. a cartel. B. a tit-for-tat strategy. C. a Nash equilibrium. D. an ultimatum bargaining game.
Regulatory forbearance
A) meant delaying the closing of "zombie S&Ls" as their losses mounted during the 1980s. B) had the advantage of benefiting healthy S&Ls at the expense of "zombie S&Ls," as insolvent institutions lost deposits to health institutions. C) had the advantage of permitting many insolvent S&Ls the opportunity to return to profitability, saving the FSLIC billions of dollars. D) increased adverse selection dramatically.
Which of the following statements about junk bonds is false?
A) Given the likelihood of default, it is never profitable to purchase junk bonds. B) They pay higher interest rates than investment grade bonds due to higher perceived risk. C) Prior to the 1970s, corporations were unable to issue junk bonds. D) A popular measure of junk bond yields reached a record low in 2012.
Sovereign debt crises are triggered ________
A) by innovations in subprime real estate markets B) when a country's debt-to-GDP ratio becomes excessively high C) when austerity measures cause a sharp fall in the supply of government bonds D) by the adoption of a common currency, such as the euro