Which of the following would cause the US dollar to increase in value compared to the Japanese yen?
(a) An increase in the money supply in the US
(b) An increase in interest rates in the US
(c) An increase in the US trade deficit with Japan
(d) The US purchase of gold on the open market
(e) The sale of $2 billion dollars worth of Japanese television sets to the US
Ans: (b) An increase in interest rates in the US
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Suppose you have $400 and the inflation rate is 4 percent. In order to earn a real return of $20 on your investment, the nominal interest rate must be
A) 1 percent. B) 5 percent. C) 9 percent. D) 12 percent.
Asymmetric information occurs when
A) buyers and sellers are not equally informed about the true quality of what they are buying and selling. B) banks face an adverse selection problem with their borrowers. C) borrowers covertly engage in activities that increase the probability of poor performance. D) All of the above.
What is the divine coincidence? When and why does it not hold true?
What will be an ideal response?
If the earnings of Chopo Co are lower than expected, the forecasts will be revised downward and the price of the company's stock will decline
a. True b. False Indicate whether the statement is true or false