A financial crisis is
A) not possible in the modern financial environment.
B) a major disruption in the financial markets.
C) a feature of developing economies only.
D) typically followed by an economic boom.
B
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Maximizing the benefits of a transaction made under a contract often requires specific investments that lose value if the parties fail to fulfill their commitments
Indicate whether the statement is true or false
Which of the following describes the purchasing power parity theory of exchange rate determination?
a. The exchange rate will adjust in the long run until the interest rate is roughly the same in both countries. b. The exchange rate will adjust in the long run until real GDP per capita is roughly the same in both countries. c. The exchange rate will adjust in the long run until the average price of goods is roughly the same in both countries. d. The exchange rate will adjust in the short run until the average price of goods is roughly the same in both countries. e. Prices adjust in the short run until the exchange rate is roughly the same in both countries.
Tara runs the only one-hour photo lab for 300 miles around, in an isolated west Texas town. Her lab technician explains to Tara that she is not producing the level of output that would minimize her average total costs. The lab technician tells her that
she should lower her price in order to increase her number of customers. Tara rejects her technician's analysis. Why doesn't she take her technician's advice?
Which of the following would be included as investment in the GDP accounts?
a. the government buys goods from another country b. someone buys stock in an American company c. a firm increases its capital stock d. All of the above are correct.