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with economies of scale & decreasing unit costs, a nation has incentive to specialize completely in the product of its comparative advantage specialize partially in the product of its comparative advantage speciale completely in the product of its comparative disavantage d. specialize partially in the product of its comparative disadvantage 38. The exporter demands payment from the Bank with a letter of credit b. bill of lading caight draft d. banker's acceptance 39. The Fed u sterization to b. to flatten the yield curve a offset the inflationary effect of excess capital flowing into the domestic monetary base. c. meet its short term interest rate, money supply & fed funds targets. d. add reserves to the banking system 40. IJapan imposes a tariff on shoes from Argentina, then 2. the price of Argentinean shoes sold in Japan will fall bthe quantity of Argentinean shoes sold in Japan will rise c. Japanese shoe producers will benefit d. Japanese consumers will benefit from lower prices for Japanese shoes e. Japanese consumers will benefit from lower prices for Argentinean shoes 41. If the marginal propensity to consume is 0.725, the income tax rate is 15% and income rises by $37.500, how much will consumption spending increase? a $23,109 b. 522,109 C$5.625 d. $27,188 e. $4,078 42. A NYC based company has total assets of $45 million & debt of $16 million. The firm's before tax cost of debt is 9.7% & its cost of equity is 13.66%. The company has a corporate tax rate of 39%. What is this firm's weighted average cost of capital (WACC)? a. 11.63% b. 10.91% c. 12.12% d. 13.15% e. 10.8796 43. What is the USD cost of a money market hedge on 550,000 GBP payables due in 180 days the GBP spot rate is $1.44, the 14 rate is 6.8% in the UK & 5.5% in the U.S. a. 5804718 b. $771,188 c. $754.228 d. 5787,021 e. None of these 44. A U.S. company has a 6 month accounts receivable equal to AUD 550,000. With the information below, determine the breakeven investment rate between a forward & money market hedge. 180 day U.S. interest rate = 4% 180day Australian interest rate = 5% 180day forward rate=AUD/50.93 Spot rate - AUD $0.92 (e) 180-day spot- AUD/$0.91 a. 2.10% b. 3.20% c. 6.14% d. 7.24%