A bank faces foreign exchange risk when:
A. it has branches in other countries.
B. it lends to foreign borrowers because they are less likely to repay a U.S. bank.
C. it has assets denominated in one currency and liabilities in another.
D. foreign governments restrict dollar-denominated payments.
Answer: C
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The term "fixed input" refers to:
A) inputs to production that do not vary with respect to quality. B) inputs to production that do not vary in price. C) inputs to production that yield a constant or "fixed" marginal product. D) inputs to production, the quantity of which cannot be varied in the short run.
The supply of money is determined by the Federal Reserve and is dependent on the demand for money.
Answer the following statement true (T) or false (F)
Without an accepted medium of exchange, people
A. have to specialize in one area of production. B. have to rely on barter in order to exchange goods and services. C. have to use credit to obtain goods and services. D. have to rely on gold or silver in order to exchange goods and services.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point E to Point B. This could be explained by
A. a change in society's preferences for hybrid cars versus motorcycles. B. an increase in economic growth. C. an increase in unemployment. D. a reduction in unemployment.