If the U.S. dollar depreciates relative to the Swiss franc, then
a. Swiss goods become more expensive in the U.S.
b. U.S. goods become more expensive in Switzerland
c. Swiss investors will pay more Swiss francs to buy each U.S. dollar
d. the U.S. will import more from Switzerland
e. the U.S. dollar-Swiss franc exchange rate will decrease
A
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In a business cycle recession, which of the following occurs?
A) The quantity of investment demanded increases and there is a movement down along the demand for loanable funds curve but no shift in the curve. B) Investment demand increases and the demand for loanable funds curve shifts rightward. C) Investment demand decreases and the demand for loanable funds curve shifts leftward. D) The quantity of investment demanded decreases and there is a rightward shift of the demand for loanable funds curve. E) The quantity of investment demanded decreases increases and there is a movement up along the demand for loanable funds curve but no shift in the curve.
Assume that you purchased a $1,000 perpetual bond that pays a market interest rate of 5 percent. If you attempted to sell this bond today subsequent to an increased market rate of interest of 7.5 percent, then you
a. could only sell this bond at a capital loss. b. could sell this bond at a capital gain. c. would not be able to sell this bond. d. could exchange your bond yielding 5 percent for a bond yielding 7.5 percent on an even exchange basis.
If a recessionary GDP gap exists, which of the following sets of policies should the Federal Reserve Board pursue?
A. Sell government securities, lower the discount rate, and lower the required reserve ratio. B. Sell government securities, lower the discount rate, and raise the required reserve ratio. C. Buy government securities, raise the discount rate, and lower the required reserve ratio. D. Buy government securities, lower the discount rate, and lower the required reserve ratio.
Collusive agreements between two firms are most likely to be honored when the game:
A. is a one-time game with the opportunity for a prisoner's dilemma. B. has a Nash equilibrium that differs from the outcome that maximizes the payoffs to the two firms. C. is a zero-sum game. D. is repeated and both firms offer credible threats if the other violates the agreement.