Author: Anonymous

Consider the market for rice in the USA. Before the tariff, producer surplus is: 

Economists’ biggest concern with tariffs is that surplus is transferred between consumers and producers.  

On April 1, 2020, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2021. The dollar value of the loan was as follows:   Date Amount April 1, 2020 $ 97,000   December 31, 2020   103,000   April 1, 2021   105,000     Angela, Inc., a U.S. company, had a euro receivable from exports to Spain and a British pound payable resulting from imports from England. Angela recorded foreign exchange gain related to both its euro receivable and pound payable. Did the foreign currencies increase or decrease in dollar value from the date of the transaction to the settlement date?     Euro Pound A) Increase Increase B) Increase Decrease C) Decrease Decrease D) Decrease Increase E) No change Decrease

Less than 50% of the countries in the world are considered to be democratic (either full or flawed democracies). 

The economy has been booming and the general population has more disposable income. At the same time, an increase in technology has decreased the amount of wheat needed to make Ramen Noodles (an inferior good).  Given these two effects, what would happen to the equilibrium price and quantity of Ramen Noodles?

Under the current rate method, which accounts are translated using current exchange rates?

Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied:   Date Spot Rate Forward Rate to Jan.15 December 16, 2021 $ 0.00082   $ 0.00089   December 31, 2021   0.00080     0.00083   January 15, 2022   0.00086     0.00086     Assuming a forward contract was entered into on December 16, what would be the net impact on Jackson’s 2021 income statement related to this transaction? Assume an annual interest rate of 12% and a fair value hedge. The present value for one half-month at 12% is 0.9950.                         A)    $800 (gain).                     B)    $1,594 (loss).            C)    $1,594 (gain).            D)    $794 (loss).            E)    $794 (gain).

In Figure 3-5, if the initial demand for margarine were D1, an increase in the price of butter, which is a substitute for margarine, would tend to cause which of the following changes in the market for margarine?    

People are more likely to purchase a consumer ratings magazine that reviews new automobiles before buying a new car than they are to purchase a consumer ratings magazine that reviews pens and pencils before buying a new pen or pencil. Which of the following best explains this behavior?

GDP includes the production of American firms, regardless of where they operate. Production by American firms in Europe, for example, contributes to the US GDP.