In emerging market countries, many firms have debt denominated in foreign currency like the dollar or yen. A depreciation of the domestic currency
A) results in increases in the firm's indebtedness in domestic currency terms, even though the value of their assets remains unchanged.
B) results in an increase in the value of the firm's assets.
C) means that the firm does not owe as much on their foreign debt.
D) strengthens their balance sheet in terms of the domestic currency.
A
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Mike's Pretzels employs labor at a wage rate of $8 per hour and rents capital for $20 per hour. At its current level of labor and capital, the marginal product of labor is 24 and the marginal product of capital is 55
Is the firm currently maximizing profit? Explain.
Which of the following leads to a decrease in real GDP?
A) an increase in interest rates B) an increase in government spending C) an increase in the inflation rate in other countries, relative to the inflation in the United States D) Households have increasingly optimistic expectations about future income.