According to purchasing power parity, the foreign exchange market will
A) undervalue the dollar if inflation in the United States is greater than it is elsewhere.
B) no longer demand dollars if the inflation rate in the United States exceeds that of other nations.
C) adjust the value of the exchange rate to reflect differing inflation rates between nations.
D) result in a flow of dollars out of the United States whenever its rate of inflation is below that of other nations.
C
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Consumption of fixed capital (depreciation) can be determined by ________.
A. subtracting net investment from real GDP B. subtracting depreciation from net investment C. adding net investment to real GDP D. subtracting net investment from gross investment
During the expansion phase of the business cycle, which of the following eventually increases?
A) income B) production C) employment D) all of the above
Jamie's marginal utility from muffins and from doughnuts (in utils) is shown in the accompanying table. Jamie spends a total of $8 on muffins and/or doughnuts every morning. The price of each muffin is $2 and the price of each doughnut is $1.MuffinsPer DayMarginal UtilityPer MuffinDoughnutsPer DayMarginal UtilityPer Doughnut140220230415320510 If Jamie consumes 2 doughnuts a day, then what is her marginal utility per dollar spent on the second doughnut?
A. 15 B. 40 C. 10 D. 20
In the presence of positive external benefits, the efficient price to charge parents for the education of their children is
A. greater than the market price. B. less than the market price. C. always zero. D. always positive.