To ensure interest rate parity, a decrease in the interest rate on Euroyen relative to Eurodollar deposits will require a greater expected appreciation of the Japanese yen against the U.S. dollar
a. True
b. False
Indicate whether the statement is true or false
False
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Refer to Scenario 18.1. What should the fishermen do if they know the factory will maximize profits and no negotiation is possible?
A) Install a treatment plant. B) Do not install a treatment plant. C) It makes no difference if the fishermen do or do not install a treatment plant. D) Install a filter. E) Exit the industry.
Answer the following statements true (T) or false (F)
1. If the marginal propensity to consume were four-fifths, the size of the multiplier would be 5. 2. The multiplier is the reciprocal of the marginal propensity to consume. 3. The multiplier is the relationship between the initial change in aggregate expenditure and the resulting change in income. 4. The higher the propensity to save, the larger the size of the multiplier. 5. If planned investment increases by $20 billion, other things remaining the same, planned saving eventually will increase by $20 billion, regardless of the size of the multiplier.
Specialization in goods and services one can produce at a low cost makes it possible for trading partners to produce a larger joint output. This is called
a. the law of absolute advantage. b. the law of demand. c. the law of production possibilities. d. the law of comparative advantage
Refer to the above graph, which shows the market for beef where demand shifted from D 1 and D 2. The change in equilibrium from E1 to E 2 is most likely to result from:
A decrease in consumer incomes An increase in the price of pork A decrease in the tax on beef products An increase in the cost of cattle feed