Author Question: In late 2010 the National Bank of Australia offered a 4 percent interest rate on a savings account ... (Read 140 times)

Chelseaamend · **on:** Jun 29, 2018

In late 2010 the National Bank of Australia offered a 4 percent interest rate on a savings account while Bank of America offered 2 percent. This difference means that

A) people expect the U.S. dollar to appreciate to 8 percent against the Australian dollar and interest rate parity to occur.
B) there will be a surplus of U.S. dollars in the foreign exchange market.
C) people expect the U.S. dollar to appreciate by 2 percent against the Australian dollar and interest rate parity to occur.
D) there will be a shortage of Australian dollars in the foreign exchange markets.

Question 2

If the wage rate is ________ the value of marginal product, a firm can increase its profit by ________.

A) greater than; selling an extra unit of output
B) less than; selling one less unit of output
C) less than; hiring an extra worker
D) less than; hiring one less worker