The higher are interest rates, the:Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aMNY.21Homework Unanswered Due Mar 17th, 11:59 PMbChigher the opportunity cost of holding currency.lower the opportunity cost of holding currency.the more expensive it is to buy bonds.the higher the demand for money.

Opportunity cost is the value of the next best alternative forgone or sacrificed when making a…

The higher are interest rates, the: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b с d higher the opportunity cost of holding currency. lower the opportunity cost of holding currency. the more expensive it is to buy bonds. the higher the demand for money.

The higher are interest rates, the: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b с d higher the opportunity cost of holding currency. lower the opportunity cost of holding currency. the more expensive it is to buy bonds. the higher the demand for money.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter29: International Finance

Section: Chapter Questions

Problem 2P

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NIIP and national wealth A country has $35 worth of factories with foreign owners. The country's nationals own $100 of wealth, of which only 52 is invested domestically. The country's treasury is holding $8 of reserves of foreign currency. Foreigners own $15 of the country's firms' stock. Foreigners hold no deposits nor other in the country. They have zero reserves of the country's currency. (a) Find the country's NIIP (b) The rate of return on all domestic investment abroad except the currency reserves is 5%. The reserves pay 0. For foreigners, the return on all their assets in the country is 2%. Find the country's NFIA. Answers. (a) -2 (b) +1 I need assistance answering questions a and b, and the answers are provided.
NIIP and national wealth A country has $35 worth of factories with foreign owners. The country's nationals own $100 of wealth, of which only 52 is invested domestically. The country's treasury is holding $8 of reserves of foreign currency. Foreigners own $15 of the country's firms' stock. Foreigners hold no deposits nor other in the country. They have zero reserves of the country's currency. (a) Find the country's NIIP (b) The rate of return on all domestic investment abroad except the currency reserves is 5%. The reserves pay 0. For foreigners, the return on all their assets in the country is 2%. Find the country's NFIA. (c) By the end of the year (January 1 next year), the country has $48 worth of claims on foreign assets (including the $8 in the treasury) and foreigners have $55 of claims on the country's assets. There were no valuation effects. Find the country's current account. (d) In (c), nothing changes for the home claims on foreigners. The foreign FDI…
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