Purchasing power parity suggests that
a. Given fixed prices, interest rates adjust so that a good costs the same across two countries
b. Given fixed exchange rates, prices adjust such that a good costs the same across two countries
c. All of the above
d. None of the above
c
You might also like to view...
The total number of workers in two different countries are equal. However, each worker in Country A is three times more productive than a worker in Country B. Which of the following is true in this case?
A) The capital stock in Country B is three times more than the capital stock in Country A. B) The total efficiency units of labor in Country A is three times more than the total efficiency units of labor in Country B. C) The total efficiency units of labor in Country A is one-third of the total efficiency units of labor in Country B. D) The total efficiency units of labor in Country B is six times more than the total efficiency units of labor in Country B.
If interest rates in Europe fall below interest rates in the United States, then, other things equal, the demand for euros will decrease
a. True b. False Indicate whether the statement is true or false
Suppose that the economy is in long-run equilibrium and the central bank decided to engage in unexpected expansionary policy by increasing the money supply. If we assume rational expectations, which of the following statements is correct about the effect of expansionary policy in the long run?
A. The unemployment rate will increase, real Gross Domestic Product (GDP) will increase and the price level will increase. B. The unemployment rate will decrease, real Gross Domestic Product (GDP) will decrease and the price level will decrease. C. The unemployment rate will remain unchanged, real Gross Domestic Product (GDP) will remain unchanged and the price level will increase. D. The unemployment rate will remain unchanged, real Gross Domestic Product (GDP) will remain unchanged and the price level will decrease.
Walmart's prices are ________ national grocery averages.
A. 50% lower than B. above C. 15-22% lower than D. 3-7% lower than