In the Short Run, an Unanticipated Shift to a More

question 8

Multiple Choice

In the short run, an unanticipated shift to a more restrictive monetary policy is most likely to result in

• A) a decrease in short-term interest rates.
• B) a reduction in the growth rate of real GDP.
• C) an increase in the rate of inflation.
• D) an increase in employment.

Evaluate the risks and returns associated with foreign exchange transactions.

Calculate the net present value (NPV) of international projects, incorporating risk factors and capital costs.

Identify opportunities for triangular arbitrage and execute calculations to determine potential profits.

Understand the role of risk-free rates in international financial decisions.