An increase in the value of the U.S. dollar will
A) reduce Canadian demand for winter homes in Arizona.
B) increase Canadian demand for winter homes in Arizona.
C) reduce the cost of homes in Arizona for Canadian buyers.
D) increase the cost of homes in Arizona for American buyers.
Ans: A) reduce Canadian demand for winter homes in Arizona.
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Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:
a. nothing, because he enjoys playing basketball more than studying. b. the increase in skill he obtains from playing basketball for that hour. c. the benefit to his grades from studying for an hour. d. nothing, because he had a free pass into the sports complex to play basketball.
Speculation in exchange markets is often thought of as conducive to wild fluctuations in exchange rates. In practice it appears that speculators
A. have destabilized several currencies that were at sustainable equilibrium levels. B. have no effect in fixed rate systems. C. in fact tend to stabilize exchange rates rather than destabilize them. D. All of the above are correct.