Question
Which of the following best describes what will happen to the value of assets traded immediately after the dollar appreciates against a foreign currency Group
Which of the following best describes what will happen to the value of assets traded immediately after the dollar appreciates against a foreign currency
Group of answer choices
Net dollar inflows will increase as foreign buyers will import more American goods
Net dollar inflows will decrease because American exports are now less valuable
Net dollar inflows will increase as American exports are more valuable
Net dollar inflows will decrease as foreign buyers will import fewer American goods
Sometimes, projects in developed countries have similar or even higher costs of capital than would a comparable project in a developing country. What could explain this?
Group of answer choices
Investors are unwilling to invest in regions with lower property protections
Developing countries are less risky
Investors like helping developing countries
The extra risk associated with developing countries is largely idiosyncratic
Which of the following should be equal to the quantity of dollars demanded by people holding euros?
Group of answer choices
The dollar value of the supply of euros to buyers holding dollars
The euro value of dollars demanded by people holding euros
The quantity of euros demanded by people holding dollars
The quantity of euros supplied to people holding dollars
A weak dollar will
Group of answer choices
force American exporters to raise their foreign currency prices
enable American exporters to improve their profit margins
enable American importers to reduce their dollar costs
cost American exporters market share abroad
Which of these is NOT the reason for market segmentation (i.e. that investors display home country bias).
Group of answer choices
Government controls
Difference in market risk
Differences in taxes
Information asymmetry
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