Other things the same, which of the following would both make foreigners more willing to engage in U.S. portfolio investment?
a. U.S. interest rates rise, the default risk of U.S. assets rise
b. U.S. interest rates rise, the default risk of U.S. assets fall
c. U.S. interest rates fall, the default risk of U.S. assets rise
d. U.S. interest rates fall, the default risk of U.S. assets fall
b
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The term "depository institution" refers to
A) savings and loan associations only. B) commercial banks, credit unions, and savings and loan associations. C) credit unions only. D) commercial banks only.
Given a positive externality, the marginal social benefits curve lies to the __________ of the demand curve, with the market output __________ the socially optimal output.
A. right; greater than B. right; less than C. left; greater than D. left; less than
Average product measures:
A. the marginal product averaged across all inputs. B. the quantity of output produced per unit of input. C. the additional output created from an additional unit of input. D. All of these are true.
The nominal rate of interest is 8.5 percent and the real rate is 5 percent. The expected rate of return on an investment is 8 percent. The firm should:
A. Not undertake the investment because the expected rate of return of 8 percent is less than the nominal interest rate B. Not undertake the investment because the expected rate of return of 8 percent is less than the nominal plus the real interest rate C. Undertake the investment because the expected rate of return of 8 percent is greater than the difference between the nominal and real interest rates D. Undertake the investment because the expected rate of return of 8 percent is greater than the real rate of interest