If interest rates in Europe fall below interest rates in the United States, then, other things equal, the demand for euros will decrease.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2In a market characterized by a single seller and many buyers, when is it profitable to increase the value of a product by incurring fixed costs?
QUESTION 3A monopolistically competitive firm operates on the ____ of their average total cost curve, where marginal cost is ____ average total cost.
a. declining portion; above
b. rising portion; above
c. rising portion; below
d. declining portion; below
QUESTION 4Assume that a British investor buys a one-year U.S. Treasury bill that pays 6 percent annual interest. Given a yield of 4 percent on a comparable British Treasury bill, the U.S. dollar must depreciate 2 percent against the British pound during the year for interest rate parity to hold.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5In a market characterized by a single seller and many buyers, will a seller's initiative to improve the quality of its product at a higher cost of production be profitable?
QUESTION 6Product differentiation in monopolistically competitive markets ensures that ____ in equilibrium.
a. marginal cost will exceed average revenue
b. price will exceed marginal cost
c. average variable cost will be declining
d. marginal revenue will equal average total cost