In general, a firm will be likely to invest as long as the
A. firm doesn't have to borrow any money to make the investment.
B. profits realized from the investment are sufficient to cover the interest payments.
C. interest rate is less than the inflation rate.
D. firm can sell bonds directly to the public instead of borrowing from a bank.
Answer: B
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The financial crisis of 2008 was triggered by:
A. a speculative bubble in the U.S. housing market. B. austerity measures introduced by the U.S. government to reduce the federal deficit. C. increased trade with China. D. the economic integration of the European Union.
The key difference between the real exchange rate and the market exchange rate is that the market exchange rate controls for the level of prices
Indicate whether the statement is true or false
After taking out a one year loan with an annual interest rate of 5 percent, Tommy pays $2,100 back to the bank. The principal of the loan must be ___________ and the interest payment must be ___________.
A. $2,000; $100 B. $2,100; $100 C. $100; $2,100 D. $100; $2,000
If interest rates in Canada fall below those in the rest of the world, then
a. it depreciates Canada's exchange rate and this may result in a surplus on Canada's current account b. the demand for Canadian dollars increases c. exports from Canada to other countries decrease d. imports into Canada from other countries increase e. the balance of payments becomes negative