If the nominal exchange rate were to be expressed as the number of units of domestic currency per unit of foreign currency, and that rate decreases, then the domestic currency has:
A. appreciated.
B. depreciated.
C. become undervalued.
D. become overvalued.
Answer: A
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According to the text, which of the following is a principal reason why firms merge?
a. to form a cartel b. to exercise greater market control c. to increase their product differentiation d. to decrease their product differentiation e. to become a monopoly
Crowding-out
A. refers to the idea that increases in government purchases inevitably cause reductions in some form of private consumption or investment. B. only occurs at full employment levels of National Output. C. is translated into inflation during periods of slack employment. D. does not include loss of leisure on the part of workers employed as a result of government spending.
The impact of instituting investment tax credits is
A) to stimulate private sector investments and increase aggregate demand. B) to stimulate private production and increase aggregate supply. C) to encourage individuals to save in an effort to increase funds available for investment. D) to curtail in excessive lending by financial institutions.
A U.S. firm that outsources jobs would be
A. Buying raw materials from a Chinese firm instead of a U.S. firm. B. Buying computers assembled in Mexico that used U.S. parts. C. Building a factory in Canada and hiring Canadian workers. D. All of the choices are correct.