Inflation _______ the risk involved in _______ contracts.
A. decreases; short-term
B. decreases; long-term
C. increases; long-term
D. increases; short-term
Ans: C. increases; long-term
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The expected return on dollar deposits in terms of foreign currency can be written as the ________ of the interest rate on dollar deposits and the expected appreciation of the dollar
A) product B) ratio C) sum D) difference
Which of the following is a problem when comparing GDPs per capita between nations?
a. GDP per capita fails to measure income distribution. b. Fluctuations in exchange rates affect differences in GDP per capita. c. GDP per capita is subject to greater measurement errors for LDCs compared to IACs. d. All of these.
A monopolist is earning an economic profit. At the present output level, MR = $35 and MC = $30 . Which of the following should the firm do to increase profit?
a. raise output and lower price b. do not change price or output c. raise price and raise output d. raise price and lower output e. lower price and lower output
Which of the following statements is correct, when the exchange rate changes from €2/$ to €1.5/$?
a. Both the euro and the dollar depreciate. b. The euro (€) depreciates. c. The euro depreciates and the dollar appreciates. d. The euro appreciates and the dollar depreciates. e. None of the above.