The possibility that changes in the value of a nation's currency will result in variations in the market value of a business's assets is referred to as
A) hedge risk.
B) foreign exchange risk.
C) conversion risk.
D) transaction risk.
Answer: B
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Assume General Motors has decided to build an assembly plant in St. Louis. The plant will employ 1,000 full-time workers at an annual wage of $40,000 each. If the marginal propensity to consume in St. Louis is 2/3, what change in income will result from operation of the plant for one year?
a. $26.7 million. b. $40 million. c. $80 million. d. $120 million.
Creative destruction
What will be an ideal response?
Economists fear deflation because:
A. falling revenue increases the likelihood that workers will be laid off. B. falling prices make firms more susceptible to bankruptcy. C. consumers anticipating further price declines will delay purchases. D. of all these reasons.
As a percentage of GDP, exports are greater than imports for which of the following countries?
A) the United Kingdom B) France C) the United States D) China