If the exchange rate between the U.S. dollar and the Indian rupee (rupees per dollar) is greater than the relative purchasing power between the two countries, which of the following would be true?
A) There are opportunities for profit by purchasing goods in India and then selling them in the United States.
B) Purchasing power parity predicts that the value of the dollar will rise as traders take advantage of arbitrage opportunities.
C) There are no arbitrage opportunities for which traders can take advantage.
D) Purchasing power parity predicts that the dollar is undervalued as traders take advantage of arbitrage opportunities.
A
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The above figure shows three possible average total cost curves
If all firms in a perfectly competitive industry each have an average total cost curve identical to ATC1, each produce 30 units, and the market price of the good is $16 per unit, then the firms A) make zero economic profit and new firms enter the market. B) make zero economic profit and no firms enter or exit the market. C) make zero economic profit and some firms exit the market. D) incur an economic loss and some firms exit the market. E) make an economic profit and new firms enter the market.
________ markets transfer funds from people who have an excess of available funds to people who have a shortage
A) Commodity B) Fund-available C) Financial D) Derivative exchange
Suppose Congress decreases income taxes. This is an example of
A) expansionary fiscal policy. B) expansionary monetary policy. C) contractionary fiscal policy. D) contractionary monetary policy.
At any point on an indifference curve, the slope of the curve measures the consumer's
a. elasticity of demand. b. income. c. willingness to trade one good for the other. d. perception of the two goods as substitutes or complements.