If purchasing-power parity holds, then the value of the
a. nominal exchange rate is equal to one. A dollar buys as many goods in the U.S. as it does overseas.
b. nominal exchange rate is equal to one. A dollar buys the quantity of foreign currency equal to the U.S. price level divided by the foreign country's price level.
c. real exchange rate is equal to one. A dollar buys as many goods in the U.S. as it does overseas.
d. real exchange rate is equal to one. A dollar buys the quantity of foreign currency equal to the U.S. price level divided by the foreign country's price level.
c
You might also like to view...
A perfectly competitive firm maximizes profits? (or minimize? losses) when it produces the quantity where marginal revenue equals marginal cost and the price? is:
A. greater than average fixed cost. B. greater than average variable cost. C. greater than average total cost. D. greater than marginal cost
The total revenue curve of a perfectly competitive firm
a. is horizontal b. is vertical c. has a diminishing slope as output increases d. has an increasing slope as output increases e. has a constant slope as output increases
What is the title of the John Maynard Keynes's book published in 1936 that challenged the classical self-correction economic theory?
a. In the Long-run We Are Dead. b. Classical Economics Revised. c. General Theory of Employment, Interest, and Money. d. A Keynesian Approach to Economic Policy.
If the above figure illustrated a perfectly competitive industry, the equilibrium market output would be equal to
A) 7. B) 11. C) 13. D) 22.