Suppose that the price of an identical sport-utility vehicle is $32,000 in U.S. dollars in the United States and $32,000 in Canadian dollars in Canada
Suppose in addition that the exchange rate between Canada and the United States is one Canadian dollar equals $0.75 U.S. dollar. Does purchasing power parity hold for SUVs between the United States and Canada? A) Yes, because SUVs have the same price in each local currency.
B) No, because SUVs are more expensive in Canada than the United States.
C) No, because SUVs are more expensive in the United States than in Canada.
D) Without knowing interest rates, we can't say.
C
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Recall the Application about genetic testing and adverse selection to answer the following question(s).According to the Application, what will ultimately happen if genetic testing for certain illnesses like Alzheimer's becomes more common?
A. Only the people who are at high risk for those diseases will purchase insurance against those illnesses. B. Only the people who are at low risk for those diseases will purchase insurance against those illnesses. C. The people who are at high risk for those diseases will decline insurance against those illnesses. D. Only the people who are at high risk for those diseases will be fired from their current jobs.
A tractor used to prepare land for planting is called
A. land. B. physical capital. C. labor. D. human capital.
The monetary policy framework is:
A. the law that created the Federal Reserve System. B. the idea that central banks should be interconnected across countries. C. a growing belief that there should be one central bank headquartered at the World Bank. D. a way to prioritize and implement the central bank's objectives when they are in conflict.
As a person buys increasing amounts of a good, their marginal utility ______ and their consumer surplus ______.
A. decreases; increases B. decreases; decreases C. increases; increases D. increases; decreases