Which of the following generates demand for foreign currencies?
A. Imports of foreign goods by firms located in the United States.
B. The building of plants by foreign corporations in the United States.
C. Exports from the United States to foreign countries.
D. Foreign tourists traveling to the United States.
Answer: A
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Which of the following is likely to have the widest bid-asked spread?
A) A U.S Treasury bill B) A U.S. Treasury note C) A U.S. Treasury bond D) A municipal bond
Which of the following circumstances would not cause GDP to either understate or overstate economic well-being today in comparison to that which existed 75 years ago?
A. A shorter workweek today B. Greater military spending today C. A trend toward merger and consolidation of business firms D. More air and water pollution
All else equal, when the Federal Reserve Banks engage in an expansionary monetary policy, the interest rates received on government bonds usually:
A. fall. B. rise. C. remain constant. D. move in the same direction as the bonds' price.
Refer to Scenario 9.3 below to answer the question(s) that follow. SCENARIO 9.3: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 per cent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $5 on average per meal. Refer to Scenario 9.3. Economic profit per week is
A. ?$400. B. $0. C. $600. D. $900.