Many economists believe that the theory of purchasing-power parity describes the forces that determine exchange rates in the long run
a. True
b. False
Indicate whether the statement is true or false
True
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Supply is elastic if
A) a 1 percent change in price leads to a larger percentage change in quantity supplied. B) a 1 percent change in price leads to a smaller percentage change in quantity supplied. C) the slope of the supply curve is positive. D) the good in question is a normal good.
Suppose that real GDP for 2015 was $10,000 billion and real GDP for 2016 was $9,500 billion. What is the rate of growth of real GDP between 2015 and 2016?
A) -10% B) -5% C) -2% D) -1%
The real wealth effect explains that higher prices
a. make people worse off by reducing the value of their wealth, leading them to save more and spend less b. make people worse off by reducing the value of their wealth, leading them to save less and spend more c. make people better off by increasing the value of their wealth, leading them to save less and spend more d. increase borrowing, leading to higher interest rates and less investment e. make domestic goods relatively more expensive, increasing the demand for domestic goods and decreasing the demand for foreign goods
A price excludable public good is such that
A. both rivalry and exclusivity hold. B. exclusivity holds, but rivalry does not. C. neither rivalry nor exclusivity hold. D. rivalry holds, but exclusivity does not.