If the banking sector borrows internationally and lends locally, how does this intensify a financial crisis?
What will be an ideal response?
The borrowed funds have to be repaid with appreciating international currencies while payments received come in the depreciating local currency.
You might also like to view...
The market for General Motors' bonds
a. exists only within the geographical boundaries of the United States b. is not defined by its geographic location c. is at the New York Stock Exchange d. is at the U.S. Treasury e. is in London, England
How do the marginal costs of pollution reduction and the marginal costs of pollution damage change as pollution levels increase?
a. The marginal costs of pollution reduction remain constant and the marginal costs of pollution increase b. The marginal costs of pollution reduction increase and the marginal costs of pollution damage increase c. The marginal costs of pollution reduction increase and the marginal costs of pollution damage decrease d. The marginal costs of pollution reduction decrease and the marginal costs of pollution damage increase e. The marginal costs of pollution reduction decrease and the marginal costs of pollution damage decrease
People accused of a crime frequently claim their innocence. Even if guilty they will sometimes agree to take a lie detector test to see if they can be exonerated. While they may know that these tests do not carry much weight in court there is another reason why they are willing to take the test. Give another valid reason from this chapter explaining why a guilty person would agree to the test.
What will be an ideal response?
Which of the following is not a characteristic of a gold standard?
A. Currency convertibility into gold B. Discretionary or activist monetary policy C. Unlimited international gold flows D. Exchange rate stability