Under a system of floating exchange rates, a surplus in a currency will lead to a(n)
A. long-term surplus of that currency.
B. depreciation of that currency.
C. appreciation of that currency.
D. long-term shortage of that currency.
Answer: B
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Suppose that a firm can invest $100 today in a project and receive $105 a year from today. There is no inflation, and the annual interest rate in the economy is 6%. The firm should
A) invest in the project because the opportunity cost is greater than the return on the investment. B) not invest in the project because the opportunity cost is greater than the return on the investment. C) invest in the project because the opportunity cost is less than the return on the investment. D) invest in the project because the opportunity cost is the same as the return on the investment.
Stephanie listens to punk rock because her friends do. This is
A) a positive sum game. B) collusion. C) positive market feedback. D) negative market feedback.