Shocks and Integration) Using the graph, which of the following has the highest degree of market integration with the other countries?
A) Peru and Colombia
B) Peru and Uruguay
C) Venezuela and Uruguay
D) Venezuela
Ans: D) Venezuela
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Suppose that the 12-month interest rates for the United States and the United Kingdom are 7% and 6% respectively, and E = 2.10 $/£. Given this information, what is the expected exchange rate change over the year?
A) 1% B) 4.2% C) 2.1% D) 2.0%
For an efficient outcome, MR must exceed MC
a. True b. False Indicate whether the statement is true or false
When an economy is in a recession,
a. strong demand for investment funds will push interest rates upward. b. strong demand for resources will push the prices of resources upward. c. the real interest rate will tend to rise. d. the unemployment rate will rise above its natural rate.
Traditional economic models assume that people care about:
A. relative consumption. B. absolute consumption. C. both absolute and relative consumption. D. neither absolute nor relative consumption.