The actual exchange rate of the real, Brazil's currency, is 2.40 real per U.S. dollar. According to the PPP estimation, the exchange rate should be 1.20 real per U.S. dollar. This implies that the real is:
A. undervalued by 50 percent.
B. overvalued by 20 percent.
C. undervalued by 20 percent.
D. overvalued by 50 percent.
Answer: A
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A) a direct relationship B) an inverse relationship C) a linear relationship D) a maximum relationship
The cost-output elasticity can be written and calculated as
A) MC/AC. B) AC/MC. C) (AC)(MC). D) (AC)2(MC). E) (AC)(MC)2.
When people make choices they typically know with certainty which choice is best
a. True b. False Indicate whether the statement is true or false
Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that
A) S/NA = (? + gA + gN)K/NA. B) S/NA = (gA + gN)K/NA. C) I/NA = (?)K/NA. D) I = ?K. E) none of the above