Suppose a given basket of goods and services costs 9 dollars in Australia and 5,400 baht in Thailand. If the exchange rate is 600 baht per Australian dollar, purchasing power parity implies that the:
A. Australian dollar must appreciate to restore purchasing power parity.
B. baht must depreciate to restore purchasing power parity.
C. exchange rate has attained its long run equilibrium value.
D. Australian dollar must depreciate to restore purchasing power parity.
Answer: C
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Refer to the figure above. What is the market-wide consumer surplus when the market price of wine is $9?
A) $180,000 B) $90,000 C) $60,000 D) $210,000
Examples of incentive pay include
a. allowing employees a certain number of personal days b. providing onsite parking for employees c. cleaning the worksite with weekly janitorial service d. prizes to the employee team to win a project goal tournament
A mechanism for reallocating risk is:
A. risk pooling. B. dividend pooling. C. risk premiums. D. None of these statements is true.
If a firm in monopolistic competition lowers its price, what will happen to the quantity of products it sells?
a. The quantity of products sold will increase and sales revenue will fall. b. The quantity of products sold will decrease because this is not perfect competition. c. The quantity of products sold will increase slightly—and in some cases not at all. d. The quantity of products sold and sales revenues will increase as the firm lures customers from its competitors and attracts new customers.