Which of the following would you expect to decrease both interest rates and exchange rates? (Assume exchange rates are stated in terms of foreign currency per domestic currency.)
A) contractionary monetary policy
B) contractionary fiscal policy
C) expansionary monetary policy
D) Both B and C will decrease both interest rates and exchange rates.
D
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Use the following table, which shows the supply and demand schedules for the euro, to answer the next question.Quantity of Euros SuppliedPriceQuantity of Euros Demanded400$1.101003601.002003000.903002860.804002670.70500Under a flexible exchange rate system, what will be the rate of exchange for one euro?
A. $0.80 B. $1.00 C. $0.90 D. $1.10
Assume that the user cost of capital (C) is simply
where r is the after tax rate of return, ? is the depreciation rate, ? is the corporate tax rate and,
r is the individual tax rate. Now assume further that the after-tax rate of return is 10 percent
and the economic depreciation rate is 2 percent. The firm faces corporate taxes of 35 percent
with an individual tax rate of 25 percent. Suppose that we now know that the present value of
depreciation allowances is 0.20. In addition, there is an investment tax credit of 0.10. What
effect does this new information have on the user cost of capital?
Characteristics shared by monopolistically competitive markets and perfectly competitive markets include: a. differentiated products. b. advertising
c. many sellers. d. brand identity.
Which of the following statements is correct?
a. The "law" of diminishing marginal utility implies that demand curves slope upward and to the right. b. If the price of a good falls, the utility-maximizing consumer will assure that marginal utility rises. c. If the price of a good falls, the consumer will purchase more of the good in order to maximize total utility. d. MU and demand have different underlying consumer behavior assumptions.