How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 1.60 dollars per British pound?
A) 38.125 British pounds
B) 28.125 British pounds
C) 48.125 British pounds
D) 58.125 British pounds
E) 18.125 British pounds
B
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The official mission of the World Bank is to
A) establish exchange rates between the currencies of member nations. B) provide funding for needed development projects that would have difficulty attracting private investment. C) advise member nations on the appropriate levels of taxation. D) fight global inflation.
The rate at which one currency can be traded for another is called the
A) terms of trade. B) exchange rate. C) transfer rate. D) coupon rate.
If all of the divisions in a vertically integrated firm are owned by the same company, why is it possible that asymmetric information problems can lead to inefficient outcomes in vertically integrated firms?
A) Divisions that produce parts for other divisions have effective monopoly power, so the outcome for these division must be inefficient. B) This outcome is no longer possible in the U.S. after passage of the Sarbanes-Oxley law. C) Vertically integrated firms are often subject to antitrust investigations, so managers routinely limit the amount of information that flows between divisions. D) Managers in some divisions may not have information about production capacities or costs in related divisions.
In the open-economy macroeconomic model which of the following falls if there is an increase in the budget deficit?
a. the interest rate b. net exports c. the exchange rate d. All of the above are correct.