When the price level of an economy is ________, ________ is occurring. Conversely, when the price level is ________, ________ is occurring. A) rising, deflation, falling, inflation B) rising, inflation, falling, deflation C) falling, inflation, rising, deflation D) falling, deflation, rising, deflation ANSWER Answer: B
If a country’s freely floating currency is undervalued in terms of purchasing power parity, its capital account is likely to be A) in deficit or tending toward a deficit. B) in surplus or tending toward a surplus. C) subsidized by the International Monetary Fund. D) a candidate for loans from the World Bank. […]
What is the name given to the weighted average of the nominal prices of the goods and services consumed in the economy? A) nominal price B) monetary value C) price level D) consumption bundle ANSWER Answer: C
A 150% return in Belarus is higher than a 15% dollar return in the U.S. A) because arbitrage opportunities exist. B) when the inflation controls are suspended in Belarus. C) it depends on whether these are nominal or real returns. D) regardless of nominal or real returns. ANSWER Answer: C
What is the name of the expression that refers to the costs that a firm incurs in changing its prices? A) fixed costs B) variable costs C) cost-base pricing D) menu costs ANSWER Answer: D
What is more appropriate to use when attempting to find information about the purchasing power of a currency? A) the spot exchange rate B) the forward rate C) the price levels D) the price indexes ANSWER Answer: C
When the external purchasing power or a currency is greater than the internal purchasing power, the currency is said to be ________. A) overvalued B) undervalued C) at parity D) in arbitrage ANSWER Answer: A
If people expect that their future purchasing power will decline, what will happen to the exchange rate today? What will be an ideal response? ANSWER Answer: Typically, when people think that the purchasing power of a money is going to decline in the future, due to higher expected inflation, they try to sell […]
________ float results from the lapse between the time when a firm deducts a payment from its checking account ledger and the time when funds are actually withdrawn from its account. A) Mail B) Processing C) Collection D) Disbursement ANSWER D
________ involves the strategic use of mailing points and bank accounts to lengthen mail and clearing floats. A) A direct send B) Concentration banking C) A lockbox D) Controlled disbursing ANSWER D
