The price of a basket of goods is $2000 in the U.S. If purchasing-power parity holds, and the dollar buys two units of some country's currency, then how many units of foreign currency does the same basket of goods cost in that country?
a. 4000
b. 2000
c. 1000
d. None of the above are correct.
a
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When the price of a good increases,
A) supply increases. B) quantity supplied increases. C) supply decreases. D) quantity supplied decreases.
________ gains from trade refer to the situation where, over time, international trade leads to an outward shift in a country's production possibility frontier
A) Static B) Dynamic C) Political D) Outward
A prisoner's dilemma is a game in which:
A. one player has a dominant strategy and the other does not. B. the players' payoffs are larger when both play their dominant strategy compared to when both play a dominated strategy. C. the players' payoffs are smaller when both play their dominant strategy compared to when both play a dominated strategy. D. neither player has a dominant strategy.
Suppose the government spending multiplier is 2. The federal government cuts spending by $40 billion. What is the change in GDP if the price level is not held constant?
A) an increase of less than $80 billion B) an increase equal to $80 billion C) an increase of greater than $80 billion D) a decrease of less than $80 billion E) a decrease of more than $80 billion