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LO5:Analyze the relevant economic indicators that relate to the operations of thecompany. Evaluate the impact of the economic environment on the business. 25.     Intimes of low ________ agents have more incentive to ________ and are lessinterested in ________.a.

     Nominalinterest rates; lend money; borrowing moneyb.    Realinterest rates; lend money; borrowing moneyc.     Realinterest rates; borrow money; lending moneyd.    market;lend money; borrowing money 26.     Incase an agent transfers money from a currency account to a demand depositaccount,a.     TheM1 decreases while the M2 does not changeb.

    TheM1 does not change while the M2 increasesc.     TheM1 does not change and the M2 does not changed.    TheM1 increases and the M2 does not change 27.    In a system with floatinginterest rates, if the demand for Canadian dollars in the UAE increases, whichof the following will most likely occur?a.    The price of Canadiangoods in UAE dirhams will increaseb.    The price of UAE goods inCanadian dollars will increasec.     There will be an increasein the deficit of the balance-of-payments in the UAEd.

    The price of Canadian dollarsin UAE dirhams will decrease 28.    The value of the simplespending multiplier will increase if:a.     The government expenditureincreasesb.    The governmentunemployment benefits decreasec.     The marginal propensity toconsume decreasesd.    The marginal propensityto save decreases 29.

    It is common to associate hyperinflationto a situation where:a.     The labor productivityincreasesb.    The total spendingdecreasesc.

     The foreign currencydepreciatesd.    The money supply growsrapidly 30.    In case of unanticipatedinflation, the situation:a.     Will benefit fixed incomeearnersb.    Will benefit consumersc.     Will benefit debtorsd.    Will benefit savers

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