________ Can Inject Risk into Foreign Currency Borrowing

question 80

Multiple Choice

________ can inject risk into foreign currency borrowing. 

• A) Movements in exchange rates
• B) Use of fixed-exchange rates
• C) Issue of domestic bonds
• D) Use of pegged exchange rates

---

Definitions:

Market Supply Elasticity

A measure of how much the quantity supplied of a good changes in response to a change in price.

Supply Curves

Graphical representations showing the relationship between the price of a good and the amount of it that producers are willing to supply at that price.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced, indicating the cost to produce an additional unit when fixed costs are excluded.

Marginal Cost Function

A mathematical representation that describes how the cost of producing one additional unit of a good varies as the quantity of production changes.