What happens if the central bank sets interest rates too high?, people borrow less, companies invest less, and the economy can slow down., people borrow more and spend more, which can cause inflation to rise., Country A has high nominal GDP per capita but low PPP‑adjusted GDP per capita. What does this indicate?, Goods and services cost more inside the country, despite the higher salaries., People earn a lot so feel rich, Country B has low nominal GDP per capita but high PPP‑adjusted GDP per capita. What does this indicate?, People earn less so feel poor, Goods and services are much cheaper locally, so money goes further, Which country's currency is typically undervalued?, Country A, Country B, If a company wants to grow quickly, should it raise capital through investment banks or take loans from commercial banks?, Investment banks because they can raise a lot of money by issuing shares or bonds, which is useful for big expansion projects., Commercial banks because they provide loans, which might be easier and faster, but the company must pay interest., Which system adjusts automatically based on supply and demand, but can be unstable if there is speculation?, A floating exchange rate, A fixed exchange rate, Most currency movements today are affected by what?, Speculation, Politics.

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