In late 2010 the National Bank of Australia offered a 4 percent interest rate on a savings account while Bank of America offered 2 percent. This difference means that
A) people expect the U.S. dollar to appreciate to 8 percent against the Australian dollar and interest rate parity to occur.
B) there will be a surplus of U.S. dollars in the foreign exchange market.
C) people expect the U.S. dollar to appreciate by 2 percent against the Australian dollar and interest rate parity to occur.
D) there will be a shortage of Australian dollars in the foreign exchange markets.
C
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Which type of demand for money causes the demand for money curve to slope downward?
a. Speculative demand. b. Precautionary demand. c. Transactions demand. d. Foreign-exchange demand.
Marginal resource cost is:
A. The increase in a firm's total cost caused by hiring one additional unit of an input B. A firm's cost of hiring one group of inputs, such as capital or labor C. The firm's demand curve for a productive resource D. Determined by the marginal physical product schedule for an input