When developing countries borrow in international credit markets, many find that they must borrow in currencies other than their own (such as dollars, yen, or euros). Why are international creditors willing to make loans in dollars, yen, or euros but not in the developing countries' currencies?
A) Lenders are not well-informed about developing countries' economic situations.
B) Lenders believe that the currencies of developing countries will always appreciate.
C) Lenders receive higher interest rates on loans in dollars, yen, or euros than on loans made in the currencies of developing countries.
D) Lenders believe that developing countries have a history of weak macroeconomic management and imprudent monetary and fiscal policies.
Answer: D) Lenders believe that developing countries have a history of weak macroeconomic management and imprudent monetary and fiscal policies.
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The aggregate demand curve illustrates the relationship between
A) the aggregate expenditure for goods and services, and the real interest rate. B) the aggregate expenditure for goods and services, and the level of current output. C) the level of current output and the real interest rate. D) the aggregate expenditure for goods and services, and the price level.
Wage-related rents are derived in the same way that land rents are derived
Indicate whether the statement is true or false
Other things the same, an increase in the price level makes the dollars people hold worth
a. more, so they can buy more. b. more, so they can buy less. c. less, so they can buy more. d. less, so they can buy less.