The devaluation of a currency develops once ________
A) an increase in the value of a country's currency develops
B) a monetary authority runs out of international reserves
C) the level of domestic income falls
D) an increase in the domestic price level develops
B
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The sum of the current, capital and official settlements accounts is always zero
Indicate whether the statement is true or false
If scarcity were eliminated,
a. all goods would be free. b. no one would have to make any choices. c. everyone could have all they want at no cost. d. all of the above are true.
The minimum points of the average variable cost and average total cost curves occur where
a. the marginal cost curve lies below the average variable cost and average total cost curves. b. the marginal cost curve intersects those curves. c. the average variable cost and average total cost curves intersect. d. the slope of total cost is the smallest.
Covered interest parity refers to the situation in which:
a. interest rates are the same in both currencies. b. spot and forward rates are the same in both currencies. c. the forward rate between the two currencies is equal to the ratio of their returns times the spot rate between the two currencies. d. there is an opportunity for arbitrage whenever prices are sluggish and sticky.