Which of the following statements about purchasing power parity (PPP) is most likely correct?
a. PPP exchange rates fluctuate considerably over the short term but do not fluctuate from year to year.
b. PPP exchange rates stay fairly constant and change only modestly, if at all, from year to year.
c. PPP exchange rates stay fairly constant over the short term, but fluctuate considerably from year to year.
d. PPP exchange rates do not fluctuate over the short term or from year to year.
b. PPP exchange rates stay fairly constant and change only modestly, if at all, from year to year.
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An increase in the productivity of producing jeans results in
A) the quantity of jeans supplied increasing. B) the supply of jeans increasing. C) buyers demanding more jeans because they are now more efficiently produced. D) buyers demanding fewer jeans because their price will fall, which signals lower quality. E) some change, but the impact on the supply of jeans is impossible to predict.
As more people started building houses in your community, more street lights were installed in your locality making it safer and easier to drive through. This is an example of a(n) ________
A) pecuniary externality B) network externality C) moral hazard D) adverse selection
Using the physician-control model to explain hospital behavior leads to which of the following conclusions?
a. Other medical inputs tend to be over used to maximize physicians' productivity. b. The use of operating rooms will be maximized with little excess capacity. c. Physicians will strive to utilize the nursing staff efficiently. d. All investment decisions will be based on optimal resource use. e. All of the above are conclusions of the physician-control model.
In the figure below, AB is the production-possibility curve of Canada. The line PQ shows the price ratio of one bushel of wheat/bale of cotton. I1 and I2 are two of the community indifference curves of Canada. With free trade, Canada can achieve a level of well-being corresponding to I2. In the absence of international trade, one bushel of wheat will exchange for ________ bale(s) of cotton in Canada. After Canada engages in international trade, one bushel of wheat will exchange for ________ bale(s) of cotton.
A. 65, 85 B. four; one C. one; 0.25 D. one; four