"Saving" refers to ____ while "savings" refers to ____
a. a stock concept; a flow concept
b. how much is saved within a certain time period; accumulated assets
c. a stock concept; accumulated assets
d. how much is saved within a certain time period; a flow concept
Answer: b. how much is saved within a certain time period; accumulated assets
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In monopolistic competition, a firm has some ability to affect the price for its product because of
A) easy entry and exit. B) economic profits. C) product differentiation. D) many competitors.
Moral hazard may arise in lending when small firms borrow funds from banks for one project (e.g., buy new machinery for a factory) and actually use the funds in other ways (e.g., buy the manager a new corporate jet)
What is the source of the asymmetric information problem in this case? A) The bank has more information about the true cost of the corporate jet than the firm. B) The bank has more information about the opportunity cost of the loaned funds. C) The firm has more information about the actual use of the funds than the bank. D) The firm has more information about the interest rate on the loan than the bank.
Assume a U.S. investor buys a Mexican bond with a face value of MXP 1,000 and a 20 percent annual interest yield while the exchange rate is MXP 10 per dollar. What is the dollar return from the bond if the exchange rate at the end of the year is MXP 11 per dollar?
a. 9.1% b. 10.0% c. 18.2% d. 20.0% e. 32.0%
Which component of aggregate demand is most impacted by the foreign trade effect?
a. investment spending b. consumption c. net exports d. government purchases