A financial strategy that reduces the chance of suffering losses arising from foreign exchange risk is referred to as
A) hedging.
B) foreign exchange leverage.
C) conversion depletion.
D) transaction mitigation.
Answer: A
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In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent. The nominal interest rate is
A) 7 percent. B) 12 percent. C) 10 percent. D) 8 percent. E) 6 percent.
An example of a supplier that used its bargaining power to charge high prices to its customers is
A) the firms that supply paper napkins to McDonald's restaurants. B) the publishers of the Encyclopedia Britannica. C) Wal-Mart, which required many of its suppliers to alter their distribution systems to accommodate Wal-Mart's need to control the flow of goods to its stores. D) the Technicolor Company, the sole producer of cameras and film that movie studios needed to produce color movies in the 1930s and 1940s.
The emphasis upon export surpluses in mercantilist theory
(a) is also called the "beggar-thy-neighbor policy" and a "favorable" balance of trade. (b) was thought to be a good thing by business people because it meant that more money was circulating and more money meant higher prices and brisk trade. (c) was thought to be a good thing by governments because it created brisk trade which yielded higher tax revenues than did slack trade. (d) is characterized by all of the above.
The expression "increase in quantity supplied" is illustrated graphically as a
A) leftward shift in the supply curve. B) rightward shift in the supply curve. C) movement up along the supply curve. D) movement down along the supply curve.