Why is portfolio diversification so important in international trade?
What will be an ideal response?
Portfolio diversification is important in international trade because parties of the trade are better off by allowing themselves to reduce the risk of the return on their wealth. Traders can divide their wealth among wider amounts of assets in turn reducing the amount of money they have riding on each individual asset.
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What effect, if any, will a good college education have on your human capital? Explain your answer
What will be an ideal response?
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.
Which of the following is true of the unit of account function of money? a. It makes money durable in nature
b. It makes the relative values of goods and services more easily known. c. It implies that money should be made of something valuable. d. It implies that money can be used to save up purchasing power. e. It implies that money is more easily counted than goods.
A fall in the discount rate will usually encourage banks to borrow from the Fed and therefore reduce the money supply
a. True b. False Indicate whether the statement is true or false