One of the problems that monetary unions eliminate is
a. inflationary gaps.
b. recessionary gaps.
c. exchange rate instability.
d. business cycles.
c
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Which of the following is an advantage for the host country of a multinational corporation?
(A) Greater political power. (B) Greater income from tariffs. (C) Greater protective tariffs. (D) Greater employment opportunities.
An increase in the price level, other things remaining the same, may be expected to result in ____ the consumption function.
A. a downward shift of B. a movement along C. an upward shift in D. no effect on
The kinked demand model of noncollusive oligopoly assumes that:
A. each firm is a least-cost producer of the product. B. demand is elastic throughout the range of production. C. marginal revenue is greater than marginal cost at the kink. D. rivals will ignore price increases and match price cuts.
For this question, assume the interest parity conditions holds. Also assume that the domestic interest rate is 10% and that the foreign interest rate is 7%. Given this information, we would expect that
A) individuals will only hold foreign bonds. B) individuals will only hold domestic bonds. C) the domestic currency is expected to appreciate by 3%. D) the domestic currency is expected to depreciate by 3%.