Use the Following Information to Answer Questions 6-9

question 21

Multiple Choice

Use the following information to answer questions 6-9.
Table 6.1: Spot and Forward Exchange Rates on May 5, 2012.

-Refer to Table 6.1.On May 5,2012,the 1-month forward yen was selling at a:

• A) 1.69% premium per annum against the dollar.
• B) 20.22% premium per annum against the dollar.
• C) 1.69% discount per annum against the dollar.
• D) 20.22% discount per annum against the dollar.

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Definitions:

Budget Deficit

A budget deficit occurs when a government's expenditures exceed its revenues over a specified period, leading to a need for borrowing or using saved reserves.

Energy Prices

The cost of purchasing energy sources such as oil, gas, coal, and electricity, which can fluctuate based on demand, supply, geopolitical stability, and environmental policies.

Economic Contraction

A decline in national output as measured by GDP, often leading to higher unemployment and lower spending.

Multiplier Size

The ratio of change in the economic output to the initial change in spending or investment that brought it about, indicating the scale of impact on the economy.