Question 6

If a person in Japan wants to purchase stock in Microsoft, she needs to buy dollars (increased demand for dollars) and sell yen (increased supply of yen).

True

False

Question 7

Other factors being constant, a lower than expected inflation rate in the U.S. will result in dollar depreciation and foreign currency appreciation.

True

False

Question 8

A higher than expected interest rate in the U.S. will result in dollar depreciation and foreign currency appreciation.

True

False

Question 9

One factor that has prevented the formation of cartels for producers of commodities is that:

Commodity produces have been able to dominate world markets

Production of most commodities is capital intensive

The demand for commodities tends to be price inelastic

Substitute products exist for many commodities

Question 10

If the supply schedule for tin is relatively inelastic to price changes, a decrease in the demand schedule for tin will cause a:

Increase in price and an increase in sales revenue

Increase in price and a decrease in sales revenue

Decrease in price and an increase in sales revenue

Decrease in price and a decrease in sales revenue