When a Mexican resident buys a ukulele from a U.S. producer, there is a(n)
A) increase in the supply of dollars in the foreign exchange market.
B) decrease in the supply of dollars in the foreign exchange market.
C) increase in the demand for dollars in the foreign exchange market.
D) decrease in the demand for dollars in the foreign exchange market.
Answer: C
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Use the following information to answer the next question. Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10% interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 each. Of the $75, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. What is the economic profit generated by Extreme Gaming in the first year?
A. $160,000 B. $280,000 C. $220,000 D. $155,000
Which of the following is a market-based solution to the problem of adverse selection?
A) Taxation B) Signaling C) Sniping D) Subsidization
If a borrower arbitrarily gains purchasing power as the result of a particular loan agreement, then
A. actual inflation was greater than expected inflation. B. actual inflation was equal to expected inflation. C. actual inflation was less than expected inflation. D. the real interest rate was greater than the nominal interest rate.
Apple is an American company, but its iPhones are assembled in China. The sale of each iPhone then is counted in China's GDP as:
A. investment. B. consumption. C. an import. D. an export.