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Author Question: In the loanable funds market, which of the following is an example of investment demand? A) Mark ... (Read 51 times)

Arii_bell

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on: Jun 29, 2018
In the loanable funds market, which of the following is an example of investment demand?
 
  A) Mark buying rare gold coins
  B) Scott purchasing a rookie-year baseball card for last year's World Series MVP
  C) Mary buying stocks for her retirement portfolio
  D) Brian, owner of Bryan Games, purchasing computers to enhance the production of games
  E) George purchasing United States savings bonds for his son's college fund

Question 2

Explain what is meant by a devaluation of a currency. Under what circumstances would a country devalue its currency?
 
  What will be an ideal response?


babybsemail

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Reply #1 on: Jun 29, 2018
Answer to Question 1

D

Answer to Question 2

In a fixed exchange rate system, a country faces a balance of payments deficit when the supply of its currency exceeds the demand at the fixed exchange rate. The country can lower the value at which the currency is pegged to increase its net exports; this is called a devaluation.


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