If a firm wants to borrow $10 million and the real interest rate increases from 5 percent to 6 percent, then the cost of the investment has increased by
A) $6 million per year.
B) $100,000 per year.
C) $1 million per year.
D) $600,000 per year.
E) nothing because the real interest rate is the return the firm will earn on its investment.
B
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Why do monopolistic firms practice international dumping?
a. They face the same demand conditions in their domestic and foreign markets. b. They face more elastic demand conditions in their domestic market than in their foreign markets. c. They face more elastic demand conditions in their foreign market than in their domestic market. d. They are able to take advantage of increasing costs.
Suppose in Italy producers can make 10,000 dresses or 1,000 coats per day, while in Canada producers can make 14,000 similar dresses or 2,000 similar coats per day. Therefore
A) 1 dress costs 7 coats in Italy. B) 1 dress costs 10 coats in Italy. C) 1 coat costs 7 dresses in Canada. D) 1 coat costs 10 dresses in Canada.