If Fear of Default on Bonds Issued by U

question 370

Multiple Choice

If fear of default on bonds issued by U.S. corporations rise, then

• A)net capital outflow and the exchange rate both rise.
• B)net capital outflow rises and the exchange rate falls.
• C)net capital outflow falls and the exchange rate rises.
• D)net capital outflow and the exchange rate both fall.

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Definitions:

Price Elasticity

A measure of how the quantity demanded of a good changes in response to a change in its price.

Gas Sales

The commercial activity of selling gaseous fuels, such as natural gas or propane, to consumers.

Convenience Store

A small retail business that stocks a range of everyday items like groceries, snack foods, and household goods, often operating for extended hours.

Own Price Elasticity

Own price elasticity measures the responsiveness of the quantity demanded of a good to a change in its own price.