Purchasing power parity:
A. allows us to compare the cost of living across different locations.
B. is the theory that purchasing power in different countries should be the same when stated in local currencies.
C. almost always holds in reality.
D. All of these statements are true.
Answer: A
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Leisure time is ignored when calculating GDP because leisure time
A) does not affect our standard of living. B) has been declining over time. C) is not an economic good. D) is not bought in a market. E) is not productive.
In which of the following situations will the price of medical care decrease with an increase in its demand?
a. When the supply of medical care is the same as the demand for medical care b. When there is an increase in productivity as a result of a technological advancement c. When there is an increase in the price of resources used to produce medical care d. When the supply of medical care increases more than the demand for medical care e. When there is an increase in future profit expectations
An actual Lorenz curve shows
A. the relationship between income and tax revenue. B. the maximum and minimum wage gaps. C. the relationship between income and earnings potential. D. the share of income received by age group. E. the cumulative share of income earned by quintiles of households.
If the income elasticity of a good is greater than zero, we say that the good is a:
A. normal good. B. inferior good. C. complementary good. D. substitute good.