Which of the following companies would gain from foreign currency depreciation?
A. Companies that borrow in foreign currency.
B. Companies that export goods and services.
C. Companies that invest in the foreign equity markets.
D. Companies that buy bonds issued by the foreign government.
Answer: A
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When input prices are fixed, decreasing returns to scale implies that the long-run average cost curve is
a. downward sloping. b. horizontal. c. upward sloping. d. U-shaped.
After enjoying a perfectly delicious meal, Duane treats himself and orders a very expensive dessert. After one bite, Duane realizes he does not care for it at all. He chokes it down while thinking about the money he just wasted on it. Duane's decision to eat the entire dessert is an example of:
A. irrational behavior. B. a cognitive bias, because he is focused on the money spent on the dessert. C. emphasizing a sunk cost instead of weighing marginal costs and benefits. D. Duane's behavior exemplifies all of these.
Recall the Application about fire protection and the median-voter rule to answer following question(s).In the Application, the decision of the community regarding the purchase a firetruck to lower the community fire rating ultimately depends on the changes in the premium and tax liability of:
A. the median voter in the community. B. all the voters in the community. C. the city council of the community. D. the richest voter in the community.
Adjusting GDP downward for the impact industry has on the environment results in a number that is greatly disputed, but is often referred to as
A. "environment-neutral GDP." B. "resource-adjusted GDP." C. "green GDP." D. "eco-output."