Foreign exchange risk is
A) a financial strategy that reduces the change of suffering losses arising from foreign exchange risk.
B) an exchange rate arrangement in which a country pegs the value of its currency to the exchange value.
C) the possibility that changes in the value of a nation's currency will result in variations in the market value of assets.
D) active management of a floating exchange rate on the part of a country's government.
C
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Suppose the price of water rose sharply. Other things constant, what is the least likely to occur?
A) People will consume less water. B) Fewer swimming pools will be filled with water. C) More high-pressure showerheads will be sold. D) The demand for water will fall.
The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?
What will be an ideal response?
For the infant-industry argument for tariffs to be appropriate, it is necessary that
A) the industry be deemed essential by the government. B) the government can identify which industries will eventually be able to compete with more established foreign producers. C) only industries that currently are operating efficiently will be protected. D) the country has access to the most modern production techniques.
The textbook suggests that the concept of needs can be quite misleading because
What will be an ideal response?