Zari takes a summer course in London, England. She doesn't buy British pounds at the U.S. airport, where the rate is 1 pound = $1.60 . Upon arrival in London, she finds that she can buy pounds for $1.65 each. Which of the following is true?
a. Zari would have been better off if she had bought pounds in the United States where U.S. dollars were cheaper.
b. Zari would have been better off if she had bought pounds in the United States where pounds were less expensive.
c. The pounds were more expensive in London because a currency is always most valued in its home country.
d. The pounds were more expensive in the United States because they are less available there.
e. It doesn't matter where she buys the pounds, since she can't use U.S. money anyway once she's in England.
B
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If a country has a positive net capital outflow, then
a. on net it is purchasing assets from abroad. This adds to its demand for domestically generated loanable funds. b. on net it is purchasing assets from abroad. This subtracts from its demand for domestically generated loanable funds. c. on net other countries are purchasing assets from it. This adds to its demand for domestically generated loanable funds. d. on net other countries are purchasing assets from it. This subtracts from its demand for domestically generated loanable funds.
If both buyers and sellers expect the price of a commodity to rise in the future, it is likely that the market clearing price ________ and the equilibrium quantity ________
A) will fall, cannot be predicted B) will rise, cannot be predicted C) cannot be predicted, will fall D) cannot be predicted, will rise