Suppose a Japanese investor purchases a dollar deposit that yields 5 percent interest at the end of a year. What will be the approximate return in terms of yen at maturity if the exchange rate moves from $1 = ¥100 to $1 = ¥105 during the year?
a. 1 percent
b. 5 percent
c. 10 percent
d. 20 percent
e. 0 percent
c
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Applying supply and demand analysis, other factors held constant, the steeper the supply curve (more inelastic), the larger the burden of a sales tax that is borne by the sellers
a. True b. False Indicate whether the statement is true or false
A monopoly will produce the same quantity of output as an otherwise similar perfectly competitive market if
a. it is a perfect price discriminator b. it corners the market c. barriers to entry are high enough d. resource suppliers have market power too e. price is greater than average total cost
If the price level is increasing and output is falling, which of the following could be the reason?
a. A negative demand shock b. A positive supply shock c. A positive supply shock combined with a positive demand shock d. A negative supply shock e. A positive demand shock
The price of a basket of goods and services in the U.S. is $600 . In Canada the same basket of goods costs 700 Canadian dollars. If the nominal exchange rate were 1.2 Canadian dollars per U.S. dollar, what would be the real exchange rate?
a. 700/600 b. 600/700 c. 700/720 d. None of the above is correct.