When borrowing is done in a foreign currency and lending is done in the domestic currency, what event creates a downturn in the economy?
a. a deprecation of its exchange rate
b. an appreciation of its exchange rate
c. an appreciation of its interest rate
d. a depreciation of its interest rate
a. a deprecation of its exchange rate
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Legal restrictions on competition, such as the grant of patent privileges to inventors,
A) destroy property rights. B) expand property rights. C) both destroy and expand property rights. D) neither destroy nor expand property rights because patents are granted by the U.S. Constitution.
College students and faculty members have a more elastic demand than the general public for Apple's iMac desktop computers. From this we can conclude that
A) Apple will earn economic profits from the computers it sells to the general public but will break even on the computers it sells to college students and faculty members. B) Apple will charge college students and faculty members lower prices than it charges the general public. C) the general public will earn arbitrage profits by buying iMac desktop computers from Apple and reselling them to college students and faculty members. D) Apple will charge college students and faculty members higher prices than it charges the general public.
Which of the following is most likely to be a monopoly?
A) AOL (America On Line), an Internet service provider B) WABC, a television station C) The Washington Post D) a public water utility
Which of the following theories of expectations holds that individuals use all information available in forming expectations?
A. Rational expectations theory B. Certainty equivalent theory C. Expected value analysis D. Adaptive expectations theory