If the Interest Rate in the U

question 36

Multiple Choice

If the interest rate in the U.S.rises, U.S.financial assets become ______ attractive to buyers and the ______ U.S.dollars will rise.

• A)more; demand for
• B)more; supply of
• C)less; demand for
• D)less; supply of

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Definitions:

Marginal Profit

The additional profit gained from producing or selling one more unit of a good or service.

MR < MC

A condition where marginal revenue is less than marginal cost, suggesting that a firm should reduce its output to maximize profit.

Economic Profits

The excess of total revenues over total costs, including both explicit and implicit costs, reflecting the true profitability of a firm.

Entry Barriers

Refers to obstacles that hinder new firms from entering a market, such as patents, strong brand loyalty among existing customers, or high capital requirements, essentially similar to barriers to entry but rephrased.