Refer to the above diagrams. Which of the following is a feasible rate at which X and Y might be exchanged?
A. 1X for 3Y
B. 1X for 1.5Y
C. 1X for 2.5Y
D. 1X for .5Y
Ans: B. 1X for 1.5Y
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If a foreign currency is quoted in American terms (the direct quote) and the forward rate for a foreign currency is less than the spot rate, the foreign currency is selling at a ________.
A) forward premium B) backward discount C) backward premium D) forward discount
Refer to Figure 13A.1. Capital deepening occurs as long as:
A. total saving exceeds depreciation. B. depreciation exceeds total saving. C. total saving and depreciation are equal. D. the level of Y is increasing.
Gregory is considering attending a concert with a ticket price of $40. He estimates that the cost of driving to the concert and parking there will add an additional $20
In order to attend the concert, Gregory will have to take time off from his part-time job. He estimates that he will lose 5 hours at work, at a wage of $8 per hour. In terms of dollars, Gregory's opportunity cost of attending the concert equals A) $80. B) $100. C) $20. D) $60. E) $40.
Changes in liquidity in the banking system affect ________
A) the nominal interest rate B) the real interest rate C) the federal funds rate D) all of the above E) none of the above