Which would indicate that hyperinflation exists? a. Sales on credit are at lower prices than cash sales. b. Inflation is approaching or exceeds 20% per year. c. Monetary items do not increase in value. d. People prefer to keep their wealth in nonmonetary assets or a stable foreign currency
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Which would indicate that hyperinflation exists?
a. Sales on credit are at lower prices than cash sales.
b. Inflation is approaching or exceeds 20% per year.
c. Monetary items do not increase in value.
d. People prefer to keep their wealth in nonmonetary assets or a stable foreign currency.
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- If a central bank decreases interest rates, then gradually: a. the country's gross domestic product is likely to decrease. b. foreign exchange rate is likely to appreciate. c. demand for exported goods and services is likely to increase. d. flows of investment funds into the country are likely to decrease.When one currency declines against the dollar, it may correspond to lower inflation in the foreign country and as a result, historical operating income and ROI's will be higher. True or False ?Why is the present value of an amount lesser than its value that is to be received (paid) in the future? a.Deflation causes investors to lose purchasing power when their pesos are invested for greater than one year. b.Investors have the opportunity to earn positive rates of return, so any amount invested today should grow to a larger amount in the future. c.Investments generally are not as good as those who sell them suggest, so investors usually are not willing to pay full face value for such investments, thus the price is discounted. d.Because investors are taxed on the income received from investments they never will buy an investment for the amount expected to be received in the future. e.None of the choices is a correct answer.
- Which of the following statements are true? Holding cash is costly when banks offer high interest rates. TRUE / FALSE An increase in the size of the underground economy increases the circulation of cash. TRUE / FALSE Holding cash is costly when inflation is low. TRUE / FALSE People demand cash only to finance transactions. TRUE / FALSE The demand for money has fallen during the Covid-19 pandemic TRUE / FALSE During times of economic uncertainty people hoard cash. TRUE / FALSEA current account deficit implies that* more goods and services are exported than are imported. the country borrowed from abroad more than it loaned and/or sold off some of its assets. the country is going bankrupt. the value of the dollar will rise. there is excessive consumption of foreign financial assets.An increase in the current account deficit will place ____ pressure on the home currency value, other things equal. A. upward B. downward C. no D. upward or downward (depending on the size of the deficit)
- Which of the following is NOT usually associated with “financial risk”? a. A rise in the country’s interest rates. b. A new government has been voted in. c. Fluctuation in a country’s currency. d. Difficulty in accessing funds from banks.In periods when home prices declined substantially, some homeowners blamed the Central bank. In other periods when home prices increased, homeowners gave credit to the Central bank. How can the Central bank have such a large impact on home prices? How could news of a substantial increase in the general inflation level affect the Central bank’s monetary policy and thereby affect home prices?Present value of an amount lesser than its value that is to be received (paid) in the future because of what reason? a.Deflation causes investors to lose purchasing power when their pesos are invested for greater than one year. b.Investors have the opportunity to earn positive rates of return, so any amount invested today should grow to a larger amount in the future. c.Investments generally are not as good as those who sell them suggest, so investors usually are not willing to pay full face value for such investments, thus the price is discounted. d.Because investors are taxed on the income received from investments they never will buy an investment for the amount expected to be received in the future. e.None of the choices is a correct answer.
- Which one of the following statements is correct? A. If a firm decreases its inventory period, its accounts receivable period will also decrease. B. The longer the cash cycle, the more cash a firm typically has available to invest. C. A firm would prefer a negative cash cycle over a positive cash cycle. D. Decreasing the inventory period will also decrease the payables period. E. Both the operating cycle and the cash cycle must be positive values.Suppose America experiences a negative balance on goods and services (imports higher than exports.) If the exchange rate decreases, then a . imports will be expensive. b . goods and services balance will remain unchanged. c . deficit on goods and services will be reduced d . deficit on goods and services will increase e . None of the answers is correctChoose the correct answer 1.) Which of the following is/are the possible effects of introducing fresh currency?[S1] Increase in money supply with the public [S2] The rise in the nominal income of public [S3] The fall in the general price level A.) Statement 1 only. B.) Statements 1 and 2 only. C.) Statement 2 only. D.) Statements 1, 2, and 3. 2.) If the quantity of money demanded exceeds the quantity of money supplied, then the interest rate will A.) fall B.) remain constant C.) rise D.) change in an uncertain direction 3.) [Case 1] Mortgagor A earns P50,000 a month while Mortgagor B earns P80,000 per month. [Case 2] Mortgagor C is willing to make a down payment of P3,000,000 while Mortgagor D will make a down payment of P5,000,000. Assuming everything else is held constant, who will have a better credit rating A.) A and C B.) A and D C.) B and C D.) B and D