If devaluation improves only the BOP, rather than the BOT, this implies that the capital account must have improved following a devaluation
Indicate whether the statement is true or false
TRUE
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Refer to Figure 14-3. What is the equilibrium outcome in this game and is this a subgame-perfect equilibrium?
A) In the equilibrium, Odeon offers $40 per copy of the software package and is accepted but this is not a subgame-perfect equilibrium. B) There is no equilibrium in this game. C) Odeon's offer of $40 per copy of the software package is accepted and this is a subgame-perfect equilibrium. D) In the equilibrium, Odeon offers $30 per copy of the software package and is rejected, and this is a subgame-perfect equilibrium.
Hedging by buying an option
A) limits gains. B) limits losses. C) limits gains and losses. D) has no limit on option premiums.
An initial increase in investment spending will generate:
a. More of an increase in income than the initial increase because of the multiplier effect b. Less of an increase in income than the initial increase because of the multiplier effect c. Less of an increase in income than the initial increase because of the net export effect d. More of an increase in income than the initial increase because of the net export effect
An increase in a per unit production tax ______ supply.
Fill in the blank(s) with the appropriate word(s).