Over Time,technology Tends To

question 39

Multiple Choice

Over time,technology tends to:

• A) set countries apart in terms of productivity.
• B) allow developing nations to experience the "catch-up" effect.
• C) diminish in nations that are still developing.
• D) spread from country to country, equalizing opportunity costs.

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Definitions:

Uncovered Interest Parity

A financial theory stating that the difference in interest rates between two countries is equal to the expected change in exchange rates between those countries' currencies.

Forward Exchange Rate

The rate agreed upon for exchanging one currency for another at a future date.

Spot Exchange Rate

The immediate rate at which one can purchase or sell currency for on-the-spot delivery.

London Interbank Offer Rate

LIBOR; a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.