The chief economist of the country of Borduria has implemented a policy of maintaining the currency of Borduria at a low value compared to its trading partner. This will cause:
a. the Bordurian exports to be cheaper for its trading partner
b. the Bordurian exports to become more expensive for its trading partner.
c. the Bordurian interest rates to be higher than its trading partner.
d. Borduria's imports from its trading partner to become less expensive.
a
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If the Fed wants to depreciate the dollar against the yen, the Fed will
A) increase the supply of dollars by selling yen. B) increase the demand for dollars by selling yen. C) decrease the supply of dollars by selling yen. D) increase the supply of dollars by buying yen.
Factors that led to worsening conditions in Mexico's 1994-1995 financial markets, but did not lead to worsening financial market conditions in East Asia in 1997-1998 include
A) rise in interest rates abroad. B) bankers' lack of expertise in screening and monitoring borrowers. C) deterioration of banks' balance sheets because of increasing loan losses. D) stock market decline.
By bundling share purchases of many investors together mutual funds can take advantage of economies of scale and thereby lower
A) adverse selection. B) moral hazard. C) transactions costs. D) diversification.
Any activity designed to transfer income or wealth to a particular individual or firm at society's expense is called:
A. Patent protection B. X-inefficiency C. Price discrimination D. Rent-seeking