If There Is an Increase in Foreign Financial Investment in the United

question 36

Multiple Choice

If there is an increase in foreign financial investment in the United States as the result of large U.S. budget deficits and attractive interest yields,

• A) fiscal policy will be more expansionary since there will be no crowding-out effect.
• B) fiscal policy will be more expansionary since U.S. residents will increase their savings, so they can repay the foreigners in the future.
• C) foreign exchange value of the dollar will depreciate, which will lead to an increase in net exports and aggregate demand.
• D) foreign exchange value of the dollar will appreciate, which will lead to a decrease in net exports and aggregate demand.

Explain the retailer's strategy in addressing the conflict between consumer and manufacturer preferences regarding product quantity.

Understand the role and impact of mobile commerce in the retail industry.

Grasp the concept of increasing a company's share of wallet among current customers.

Recognize the importance of convenient store locations and the concept of "location, location, location" in retail success.

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Definitions:

Intrinsic Value

The actual, inherent value of a financial asset, determined through fundamental analysis without reference to its market value.

Strike Price

The pre-determined price at which the holder of an option can buy (call option) or sell (put option) the underlying asset.

Call Premium

The amount by which the call price of a bond or other security exceeds its face value, often applicable when the security is called before maturity.

Out-of-the-money

A term used in options trading referring to an option that has no intrinsic value. For a call option, it means the stock price is below the strike price; for a put option, it means the stock price is above the strike price.