Economics

If the dollar interest rate is 4 percent, the euro interest rate is 6

If the dollar interest rate is 4 percent, the euro interest rate is 6 percent, then A) an investor should invest only in dollars. B) an investor should invest only in euros. C) an investor should be indifferent between dollars and euros. D) invest only in dollars if the exchange rate is expected to remain […]

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Date: September 10th, 2020

Which of the following has been confirmed by empirical tests of the Ri

Which of the following has been confirmed by empirical tests of the Ricardian model? A) All predictions of the model for a multi-product, multi-country world are highly unrealistic. B) The existence of nontraded goods results in a high degree of specialization among countries. C) International trade has no impact on income distribution. D) The unimportance […]

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Date: September 10th, 2020

How are the following transactions entered into the U.S. balance of pa

How are the following transactions entered into the U.S. balance of payments? (a) The U.S. government sends $2,000 worth of food aid to Africa. (b) A U.S. firm exports $10,000 worth of goods to the United Kingdom, payable in 3 months. (c) A U.S. tourist in Amsterdam spends $200 for food and hotels.   ANSWER […]

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Date: September 10th, 2020

If the dollar interest rate is 10 percent, the euro interest rate is 6

If the dollar interest rate is 10 percent, the euro interest rate is 6 percent, then A) an investor should invest only in dollars if the expected dollar depreciation against the euro is 4 percent. B) an investor should invest only in euros if the expected dollar depreciation against the euro is 4 percent. C) […]

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Date: September 10th, 2020

Which of the following is NOT a problem in the implementation of indus

Which of the following is NOT a problem in the implementation of industrial policies? A) Choosing the industry to target B) Knowing the optimum amount of resources to provide the targeted industry C) The encouragement of rent seeking by firms in other industries D) The benefits are partly captured by foreign firms. E) All of […]

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Date: September 10th, 2020