Laura Kaid owns a business and is willing to invest in capital until, at the margin, her investment yields a cash stream with a present value less than the marginal cost of the investment.
a. True
b. False
Question 2
Suppose U.S. consumers start buying more English shoes and fewer U.S. shoes. What impact will this trend have on the foreign exchange market?
a. U.S. demand for foreign exchange, in general, and British pounds, in particular, will increase.
b. U.S. demand for foreign exchange, in general, and British pounds, in particular, will decrease.
c. U.S. demand for British pounds will increase, but the demand for foreign exchange will probably decrease.
d. U.S. demand for British pounds will decrease, but the demand for foreign exchange will probably increase.
e. There is no effect on foreign exchange.
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