If inflation is higher in the home market, what is expected to happen to the real value of the home currency as time passes?

Why may a "black market" develop in nations in which government has imposed capital controls?

a. All foreign currency purchases and sales are conducted and controlled by the government, and it is illegal to trade privately. b. Traders are trying to avoid the taxes they must pay on each transaction. c. The government makes a huge profit on currency trades that the private sector wants access to. d. None of these explains why a "black market" may develop in these nations.

In a perfectly contestable market in the long run, each firm

A. produces at the minimum point on its long-run average total cost curve. B. earns a profit below its opportunity cost of capital. C. avoids making capital expenditures. D. All of the responses are correct.