The speculative motive for holding money is closely tied to what function of money?
A) store of wealth
B) unit of account
C) medium of exchange
D) standard of deferred payment
A
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If a one-year bond is purchased for $700 and the interest rate is 5 percent, what will it pay in one year?
A) $35 B) $665 C) $735 D) $770
Suppose the GDP deflator in the United States is 125 and the GDP deflator in Japan is 100. Also assume the United States has trade barriers on Japanese goods in the form of quotas
What does this imply about the exchange rate of yen per dollar under the theory of purchasing power parity in the long run? A) The exchange rate of yen per dollar will be equal to 1.25. B) The exchange rate of yen per dollar will be greater than 0.8. C) The exchange rate of yen per dollar will be less than 0.8. D) The exchange rate of yen per dollar will be equal to 0.8.