In practice
A) changes in national price levels often tell us relatively little about exchange rate movements.
B) changes in national price levels raise the exchange rate.
C) changes in national price levels lower the exchange rate.
D) changes in national price levels often tell us about exchange rate movements.
E) changes in national price levels match identical changes in the exchange rate.
A
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Aggregate expenditures fall as prices rise because higher prices
a. reduce the value of household financial assets and hence reduce planned consumption. b. increase demand for imports and discourage exports. c. cause higher interest rates, which reduce the demand for investment. d. All of these.
The value of the resources flowing into firms is precisely the value of the goods and services flowing out of the firms
Indicate whether the statement is true or false
When a business purchases a $25,000 computer system by writing a check, the business's balance sheet will:
A. only show an increase in liabilities of $25,000. B. show an increase in assets and liabilities of $25,000. C. only show an increase in assets of $25,000. D. still show the same total amount of assets as before the purchase.
The buyer of a derivative is ________ assuming risk relative to the seller.
A. less comfortable B. more comfortable C. less open to D. just as comfortable