In an agreement to exchange dollars for euros in three months at a price of $0.90 per euro, the price is the
A) spot exchange rate.
B) money exchange rate.
C) forward exchange rate.
D) fixed exchange rate.
C
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The marginal benefit of an activity is i. the benefit from a one-unit increase in the activity. ii. the benefit of a small, unimportant activity. iii. measured by what the person is willing to give up to get one additional unit of the activity
A) i only B) ii only C) iii only D) i and iii E) ii and iii
A decrease in the real interest rate outside of the United States will ________ the demand for the dollar and ________ the demand for foreign financial assets
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Which of the following about inflation is true?
a. High and variable rates of inflation will be easy for decision makers to forecast accurately. b. Unanticipated inflation is an increase in the general level of prices that was not expected by most decision makers. c. In contrast with unanticipated inflation, anticipated inflation implies that the increase in the general level of prices was expected by borrowers but not lenders. d. Inflation will increase the prices of goods and services that households purchase but not the wage rates of workers.
According to the principle of diminishing returns, if all factors of production but one are held constant and if that one factor is doubled, then eventually output will most likely:
A. double too. B. less than double. C. more than double. D. remain unchanged.