After a depreciation of the home currency, what is the situation with a nation's external wealth?
A) It will rise if external liabilities exceed external assets.
B) It will fall if external liabilities exceed external assets.
C) It will rise if domestic liabilities exceed domestic assets.
D) It will fall if domestic liabilities exceed domestic assets.
Ans: B) It will fall if external liabilities exceed external assets.
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When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean? What is the opportunity cost?
What will be an ideal response?
Behavioral economists argue that asset price bubbles and other examples of herd behavior may be due to biases resulting from the law of small numbers
In particular, the investors may observe unusually ________ returns for some asset and use this limited information to ________ the probability that returns will be high in the future. A) low, over-estimate B) low, under-estimate C) high, over-estimate D) high, under-estimate
Moral hazard is a
a. Pre-contractual problem b. Post contractual problem c. Post firing problem d. None of the above
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.