When a foreign business firm buys or builds capital goods, this is known as
A. foreign direct investment.
B. net foreign domestic investment.
C. net private domestic investment.
D. depreciation.
Answer: A
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When nominal interest rates increase, the opportunity cost of holding money will ________, and the quantity of money demanded by households and firms will ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Adverse selection is a situation in which one party, as a result of a contract, has an incentive to alter their behavior in a way that harms the other party to the contract
a. True b. False
The foreign exchange market is the market on which ________ of various nations are traded for one another.
A. stocks and bonds B. international financial securities C. goods and services D. currencies
The first run on a British bank since 1866 occurred in August 2007 at which bank?
A) Liberty Mutual B) Liberty Rock C) Northern Rock D) Bank of England E) First Savings and Loan