This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose the U.S. one-year interest rate is 3 per year, while a foreign country has a one-year ... (Read 113 times)

nevelica

  • Hero Member
  • *****
  • Posts: 563
on: Jun 30, 2018
Suppose the U.S. one-year interest rate is 3 per year, while a foreign country has a one-year interest rate of 5 per year. Ignoring risk and transaction costs, a U.S. investor should invest in foreign bonds as long as the expected yearly rate of depreciation of the foreign currency is
 
  A) less than 5.
  B) greater than 5.
  C) greater than 2.
  D) less than 2.
  E) less than 1.

Question 2

Explain how an increase in the unemployment rate will affect bargaining power and nominal wages.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

chloejackso

  • Sr. Member
  • ****
  • Posts: 316
Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

As the unemployment rate increases, it is more difficult for individuals to find employment at other firms. So, workers' bargaining power will fall. As bargaining power falls, the nominal wage will fall.


nevelica

  • Member
  • Posts: 563
Reply 2 on: Jun 30, 2018
Gracias!

miss.ashley

  • Member
  • Posts: 371
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

Did you know?

When Gabriel Fahrenheit invented the first mercury thermometer, he called "zero degrees" the lowest temperature he was able to attain with a mixture of ice and salt. For the upper point of his scale, he used 96°, which he measured as normal human body temperature (we know it to be 98.6° today because of more accurate thermometers).

Did you know?

Pink eye is a term that refers to conjunctivitis, which is inflammation of the thin, clear membrane (conjunctiva) over the white part of the eye (sclera). It may be triggered by a virus, bacteria, or foreign body in the eye. Antibiotic eye drops alleviate bacterial conjunctivitis, and antihistamine allergy pills or eye drops help control allergic conjunctivitis symptoms.

Did you know?

Colchicine is a highly poisonous alkaloid originally extracted from a type of saffron plant that is used mainly to treat gout.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Age-standardized disability-adjusted life year (DALY) rates from hepatitis B by country (per 100 000 ... Age-standardized disability-adjusted life year (DALY) rates from hepatitis B by country (per 100 000 ...
Effect of Increasing the Investment Rate on the Steady State Effect of Increasing the Investment Rate on the Steady State
GDP per Capita by Country Group, 1820–2008 GDP per Capita by Country Group, 1820–2008
How to calculate invest at each rate How to calculate invest at each rate
For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ... For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ...
Suppose a country imports televisions. The country's supply and demand curves are shown in ... Suppose a country imports televisions. The country's supply and demand curves are shown in ...
Video: Ciliate conjugation Animation

For a complete list of videos, visit our video library