When an economy is closely tied to another, larger economy, floating exchange rates are usually desirable
Indicate whether the statement is true or false
FALSE
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At any given moment, there is one exchange rate
A. for currencies in the free world. B. between every pair of currencies. C. for all the world’s currencies. D. established by the Federal Reserve Board.
As default risk increases, the expected return on corporate bonds ________, and the return becomes ________ uncertain, everything else held constant
A) increases; less B) increases; more C) decreases; less D) decreases; more
Mika withdraws $100,000 from her trust fund to start up her own manicure business. The trust fund earns 4 percent interest. In order to properly account for all costs of her business, Mika must not forget:
A. the implicit cost of $104,000. B. the implicit cost of $4,000. C. the explicit cost of $104,000. D. the explicit cost of $4,000.
If the price of good X (measured on the horizontal axis of a budget line diagram) increases at the same time that the price of good Y (measured on the vertical axis) decreases, the budget line
a. will become flatter b. will become steeper c. could become either steeper or flatter, depending on the sizes of the price changes d. will rotate about its original point of intersection with the horizontal axis e. will shift outward, but not in a parallel fashion