Suppose the U.S. one-year interest rate is 3% per year, while a foreign country has a one-year interest rate of 5% per year. Ignoring risk and transaction costs, a U.S. investor should invest in foreign bonds as long as the expected yearly rate of depreciation of the foreign currency is
A) less than 5%.
B) greater than 5%.
C) greater than 2%.
D) less than 2%.
E) less than 1%.
D
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Which of the following statements brings out the relationship between the value of marginal product (VMP) and the marginal revenue product (MRP)?
a. They are the same for a firm selling in a perfectly competitive market structure. b. They are the same for a firm purchasing inputs in a perfectly competitive market structure. c. VMP is greater than MRP when a firm is perfectly competitive in the product market. d. VMP is less than MRP when a firm is perfectly competitive in the product market. e. They are same when a firm is a monopolist.
Mercantilism was a system in which all of the following were true except:
A. governments limited growth by protecting monopolies. B. governments encouraged growth by supporting trading activities. C. economic rather than social forces controlled the central economic decisions. D. political rather than social forces controlled the central economic decisions.