Suppose that the country of Argentina has an 6% real interest rate and an expected inflation rate of 10%. Which of the following is the best estimate of the nominal interest rate in the country?
a. 16%
b. 8%
c. 4%
d. 18%
e. none of the above
a. 16%
(10+6 =16)
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A) can be explained by the rational ignorance theory. B) can be explained by the rational self-interest theory. C) cannot be explained by the rational self-interest theory. D) prove that there is no scarcity in the United States.
The reason that most of the coffee that is consumed in the United States comes from Colombia is that
A) Colombia has an absolute advantage in producing coffee relative to the United States. B) Colombia has a comparative advantage in producing coffee relative to the United States. C) coffee cannot be grown in the United States. D) government trade disincentives regarding Colombian coffee make such trade possible.
Vertical contracts between manufacturers and retailers often aim to
a. Incentivize the manufacturers to undertake costly activities, which they otherwise may not realize the full benefits of on their own b. Reward the manufacturers for undertaking the risk inherent in introducing a new product c. Serve as a "signal" of the manufacturer's belief of the likely success of his product d. All of the above
Which of the following demonstrates why international trade is helpful to businesses?
a. Hakan went car shopping and test drove models from several international automakers. b. The app that Martin designed could be modified and sold in any market around the world. c. Deb’s Designs had to compete in the clothing market against less-expensive import brands. d. At the local big box store, Lin found deep discount prices on many essential household items.