In emerging market countries, many firms have debt denominated in foreign currency like the dollar or yen. A depreciation of the domestic currency
A) results in increases in the firm's indebtedness in domestic currency terms, even though the value of their assets remains unchanged.
B) results in an increase in the value of the firm's assets.
C) means that the firm does not owe as much on their foreign debt.
D) strengthens their balance sheet in terms of the domestic currency.
A
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Refer to Table 19-12. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The base year used in calculating real GDP is
A) 2013. B) 2014. C) 2015. D) 2016.
In which of the following cases does the benefit principle provide little guidance?
a. The benefits of the program are spread throughout the population. b. Gasoline taxes are used to fund highways. c. It is difficult to identify the beneficiaries of government programs. d. In cases a and c. e. In none of the above cases.
If it costs Con Ed approximately $20 per additional ton of air pollution abated, but it costs PG&E only $10 per additional ton of air pollution abated and a marketable pollution permit trades for $14 per ton,
A. both PG&E and Con Ed could gain by buying. B. PG&E could gain by buying and Con Ed could gain by selling. C. both PG&E and Con Ed could gain by selling. D. society would gain if PG&E would sell and Con Ed would buy.
The present discounted value of a future payment becomes smaller when
A) the nominal interest rate decreases. B) the payment is made sooner rather than later. C) the payment itself decreases. D) all of the above E) none of the above