Suppose the current exchange rate between the U.S. dollar and the Mexican peso is $0.10 = 1 peso. Furthermore, suppose the price level in Mexico rises 15 percent while the U.S. price level remains constant. According to the purchasing power parity theory, which of the following exchange rates comes closest to being the equilibrium exchange rate?

If depreciation exceeds gross investment, net investment is negative

Indicate whether the statement is true or false

The demand curve for loanable funds is downward sloping because: a. people save more at higher interest rates

b. more investments are profitable at low interest rates than at high interest rates. c. future income is more valuable now at higher interest rates than at lower interest rates. d. usury laws increase the quantity of funds demanded at low interest rates but do not affect the quantity of funds demanded at high interest rates.