Purchasing power parity does not hold in the short to medium run because
A. countries produce different goods.
B. exports don't equal imports.
C. exchange rates fluctuate too much.
D. most business cycles are caused by shocks to aggregate demand.
Answer: A
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Which of the following about Social Security is true?
a. The regressive nature of the Social Security benefit formula works to the advantage of groups with below average earnings. b. Groups with an below average life expectancy gain from Social Security because they will typically draw retirement benefits over a more lengthy period of time. c. The life expectancy of Hispanics at age 20 is generally lower than the figures for whites and blacks. d. Hispanics derive a higher return from their Social Security taxes than whites, and substantially higher than blacks.
Monopolistically competitive firms try to ______ because P ? MC.
a. reduce customer expectations b. reduce customer demand c. keep the same number of customers d. attract more customers
When discussing the price elasticity of demand we generally refer to the absolute price elasticity of demand by consumers. This means that we will
A. consider absolute rather than relative changes. B. ignore its relationship to demand. C. disregard the minus sign. D. disregard the law of demand.
Suppose that there is a current account deficit of $250 billion and a financial account surplus of $250 billion. It can be concluded that the
A. overall balance of payments equals $500. B. overall balance of payments is balanced. C. overall balance of payments is more than $250. D. overall balance of payments is not balanced.