If a toy store overestimates the demand for a toy in 2004 and, as a result, has an unexpectedly large number of toys in stock at the end of the year, the value of the inventory of these toys will be considered as:
a. investment in 2004

Countries that borrow large amounts of money from foreign lenders prefer to:

A) hold an undervalued currency. B) hold an overvalued currency. C) have a high rate of unemployment. D) have a low rate of inflation. Suppose India borrows $10,000 from the U.S. at the beginning of 2012. The flexible exchange rate is 50 Indian rupees per dollar.

Suppose a British bank offers a 3 percent interest rate while a U.S. bank offers a 7 percent interest rate. People must expect the U.S. dollar will

A) depreciate 4 percent. B) appreciate 4 percent. C) appreciate 10 percent. D) depreciate 10 percent.