-If the Economy in the Diagram Above Is Open to Trade

question 95

Multiple Choice

-If the economy in the diagram above is open to trade and the world price of oil is $20 per barrel,then this economy will __________ million barrels of oil.

• A) import 7
• B) import 9
• C) import 11
• D) import 18
• E) export 7

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Definitions:

Floating-rate Debt

Floating-rate Debt refers to loans or bonds with a variable interest rate, which adjusts periodically based on a benchmark interest rate or index.

LIBOR

The London Interbank Offered Rate, which is a benchmark rate that some of the world’s leading banks charge each other for short-term loans.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, including loans, bonds, or credit lines.

Floating-rate Debt

A form of debt where the interest rate varies over time based on a benchmark interest rate or index.