The Japanese real interest rate declines relative to the German real interest rate. German net exports ________ and the German exchange rate ________
A) increase; rises
B) increase; falls
C) decrease; rises
D) decrease; falls
C
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A preferred shareholder
a. receives a stated dividend yield if profits are sufficient b. can vote at shareholder meetings on important corporate matters c. can vote at shareholder meetings only on the election of the members of the board of directors d. can convert his or her shares into common shares e. receives a dividend before bondholders receive anything
Excess reserves are important to bankers because:
a. They are typically deposited in special high-yielding investment accounts. b. They represent the funds that can be used to acquire income-producing assets, such as loans and securities. c. They indicate the profits that are divided among the financial institution's owners. d. They indicate profitable banking practices. e. If they are not maintained, banking regulators may shut down the bank.
When the implicit cost of capital is positive, then the:
a. firm's accounting profit will be less than its economic profit. b. firm's economic profit will be less than its accounting profit. c. firm's explicit costs will be zero. d. firm is incurring no opportunity costs
If people do NOT always make the same mistakes when forecasting the future, then
A. the policy irrelevance theorem holds. B. the Fed can control monetary policy and determine real variables such as real GDP. C. rational expectations are irrational. D. fiscal policy is more effective than monetary policy at fine-tuning the economy.