If an exporter wants to limit the effect of possible changes in the exchange rate on the value of her exports, then she can adopt a strategy known as
A) floating.
B) speculating.
C) hedging.
D) appreciating.
C
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Which of the following is NOT an asset of a bank?
A) Cash equivalents of the bank B) Stockholders' equity C) Long-term investments made by the bank D) Official bank reserves
The equilibrium real interest rate is 5 percent. If the real interest rate is
A) anything other than 5 percent, the supply of loanable funds curve and/or the demand for loanable funds curve will shift to move the real interest rate to 5 percent. B) 6 percent, the demand for loanable funds curve will shift rightward as firms enter the market to borrow at the lower rate. C) 2 percent, there is a shortage of loanable funds. D) 8 percent, there is a surplus of loanable funds. E) 3 percent, then the supply of loanable funds curve will shift leftward as new savers enter the market.
A bank's assets consist of $1,000,000 in total reserves, $2,100,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $3,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 20 percent, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?
a. $600,000; $600,000 b. $600,000; $3,000,000 c. $400,000; $400,000 d. $400,000; $2,000,000
If the wage rates in Canada are lower than in the United States,
a. workers in the United States will want to go to Canada and Canadian businesses will want to locate in the United States b. workers in Canada will want to go to the United States and businesses in the United States will want to locate in Canada c. unfair international competition is taking place d. goods will be more expensive in Canada e. the wage differentials will become wider over time