What will a U.S. corporation do if it believes that the dollar will continue to appreciate when it changes foreign earnings back into dollars?
What will be an ideal response?
The corporation would purchase a futures contract or hedge that allows it to lock into an exchange rate beforehand, so that the company will not lose profits from a devalued currency.
You might also like to view...
Which of the following statements is FALSE?
A) Saving helps create economic growth. B) Improvements in quality of education are important for economic growth. C) Free international trade helps create economic growth. D) Faster population growth is the key to growth in real GDP per person. E) Economic freedom requires property rights.
What is the best outcome for society: when firms in an oligopoly enter into a collusive agreement to operate as a monopoly or when they act as perfect competitors? Briefly explain your answer
What will be an ideal response?
Refer to the above table. Suppose the price of X increases from $10 to $12. What is the cross price elasticity of demand between X and Y?
A) -1.833 B) +0.545 C) +0.579 D) +1.833
What most accurately describes the U.S. compared to other nations in the early 1900s?
a. The U.S., which was still quite young, was one of the least productive nations in the world in both the agricultural and manufacturing sectors. b. The U.S., Great Britain and Germany were the three most industrialized nations. c. The industrial output in the U.S. was about average compared the rest of the nations in the world. d. The U.S., which had large supplies of land, had a highly productive agricultural sector, but its industrial productivity was quite low relative to that of other nations.