In the interest rate parity condition with imperfect substitutes and a risk premium of ?
A) an increased stock of domestic government debt will raise the difference between the expected returns on domestic and foreign currency bonds.
B) a decreased stock of domestic government debt will raise the difference between the expected returns on domestic and foreign currency bonds.
C) an increased stock of domestic government debt will reduce the difference between the expected returns on domestic and foreign currency bonds.
D) an increased stock of domestic government debt will have no effect on the difference between the expected returns on domestic and foreign currency bonds.
E) a decreased stock of domestic government debt will have no effect on the difference between the expected returns on domestic and foreign currency bonds.
A
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Referring to the previous question, which of the following best describes the adjustment to the new market equilibrium?
A) Price would fall, causing quantity supplied to decrease until the new equilibrium is reached. B) Price would rise, causing quantity supplied to increase until the new equilibrium is reached. C) Price would fall, causing quantity supplied to increase until the new equilibrium is reached. D) Price would rise, causing quantity supplied to decrease until the new equilibrium is reached.
Identify changes in three variables that would cause the FE line to shift to the right
What will be an ideal response?
Considering capital, marginal factor cost is defined as the
a. extra output produced by employing one more unit of capital (or loanable funds) b. extra total cost attributed to employing one more unit of capital (or loanable funds) c. contribution of capital (or loanable funds) to the final product d. change in capital (or loanable funds) required to produce one more unit of output e. change in total revenue contributed by an extra unit of capital (or loanable funds)
If R is the reserve ratio, then the money multiplier is given by 1 / (1+R).
Answer the following statement true (T) or false (F)