During expansions
a) sales and profits rise.
b) sales rise, but profits fall.
c) sales fall, but profits rise.
d) sales and profits fall.
Answer: a) sales and profits rise.
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Suppose a given basket of goods and services costs 15 dollars in the United States and 14,250 won in Korea. If the exchange rate is 900 won per dollar, purchasing power parity implies that the:
A. exchange rate has attained its long run equilibrium value. B. won must appreciate to restore purchasing power parity. C. dollar must depreciate to restore purchasing power parity. D. dollar must appreciate to restore purchasing power parity.
Which of the following is NOT true of an insolvent bank?
A) Its net worth is negative. B) It may be unable to pay off its depositors. C) The value of its assets is less than the value of its liabilities. D) It must have no more deposits.
Since 1979, the price of crude oil in real terms
a. has fluctuated but the overall trend has been downward. b. rose during 1980-2000 . but the price trend has been downward since 2000. c. declined throughout most of the 1980s and 1990s, but in 2011 the price was once again higher than the level of 1980. d. all of the above are true.
The birth rate in most LDCs is
A. lower than that of most industrial countries. B. the same as most industrial countries. C. much higher than that of most industrial countries.