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Evaluate each of the following statements having to do with the international foreign exchange markets, then select the best answer from the lettered choices below.
1) Without the foreign exchange markets (by which citizens all over the world acquire the foreign money they need for purchases of the goods of foreign nations) international trade would not be possible.
2) The exchange rates in the international foreign exchange markets track the trade currency ratios of internationally traded claims more closely than the trade currency ratios of internationally traded goods.
A) Only statement 1 is true.
B) Only statement 2 is true.
C) Both statements 1 and 2 are true.
D) Neither statement 1 nor 2 is true.
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The relationship between Price elasticity of demand and Marginal Revenue can be shown to be: MR = P 1 ?1/|e|
Assume a consumer who has current-period income y=200, future period income y’=150, current taxes t = 40, and future taxes t’= 50, and faces a market interest rate of r=5 percent or .05. The consumer would like to consume such that c’=c*(1+r) if poss..
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Yolanda owns an art factory in Palermo, Italy. She is thinking of expanding her exports of large-size paintings of Italian cityscapes. She has had little difficulty recruiting new artists to Palermo to work a 40-hour week in the factory.
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