From uncovered interest parity, we know that when the domestic interest rate is greater than the foreign one:
a. the domestic currency is expected to appreciate.
b. the domestic currency is expected to depreciate.
c. the foreign currency is expected to appreciate.
d. the foreign currency is expected to depreciate.
Ans: b. the domestic currency is expected to depreciate.
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Answer the next question on the basis of the following information: Three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit prices of these three goods are A = $2, B = $3, and C = $1.If the per unit prices of the three goods were each $1 in a base year used to construct a GDP price index, then real GDP in the current year is ________.
A. $160 B. $115 C. $45 D. $110
What is the difference between a public franchise and a public enterprise?
A) Both refer to a service provided directly to consumers through the government, but "public franchise" is a term more commonly used in the United States while "public enterprise" is more commonly used in European countries. B) A public franchise grants a firm the right to be the sole legal provider of a good or service. A public enterprise refers to a service that is provided directly to consumers through the government. C) A public enterprise is owned by the public through its holdings of shares of stock in the enterprise. A public franchise is a firm owned by the government. D) A public enterprise grants a firm the right to be the sole legal provider of a good or service. A public franchise refers to a service that is provided directly to consumers through the government.
How do you determine is a foreign exchange market is efficient?
A) See if the market rates adjust quickly to new and relevant information. B) See if systematic profit opportunities are quickly eliminated. C) See if forward rates are equal to expected future spot rates. D) All of the above should be true if a foreign exchange market is efficient.
How sensitive is the structural deficit to the state of the economy?
A. It is insensitive to the state of the economy. B. The structural deficit changes cyclically with the economy. C. Changes in the structural deficit trigger opposite swings in the economy. D. The structural deficit changes countercyclically with the economy.