If the law of one price holds for a single good, then absolute PPP measured with price indexes will also hold
Indicate whether the statement is true or false
FALSE
Explanation: Since consumers in different countries consume different goods, price indexes are not directly comparable internationally. Thus using price indexes to measure PPP creates problems and causes deviations from PPP.
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What is the essential characteristic of money?
A) It must be backed by some other tradable commodity. B) It must be backed by gold or silver. C) It must be accepted and used by people as a general medium of exchange. D) It must be declared by government authority.
Why is the unemployment rate among teenage workers so much higher than other workers?
a. They have little education. b. They take unskilled jobs. c. They are the first laid off when the economy slows down. d. All of the above are reasons why the unemployment rate is so much higher among teenagers.
The U.S. government imposes import quotas on many agricultural products, especially products that receive price supports. Offer an economic explanation for this
What will be an ideal response?
If productive efficiency characterizes a market
A) the marginal cost of production is minimized. B) firms produce the goods that consumers desire most. C) the output is being produced at the lowest possible cost. D) firms use the best technology available to produce the good.