The law of one price (LOOP) indicates that:
a. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits.
b. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country.
c. The quantity produced of a good in one country should be equal to the exchange-rate-adjusted quantity produced of the same product in another country.
d. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country.
e. All the above.
.B
You might also like to view...
According to the Application, Singapore requires workers who are under 50 years of age to save ________ percent of their earnings, with employers contributing another ________ percent
A) 50; 30 B) 20; 15.5 C) 10; 10 D) 40; 20
A homeowner making a mortgage payment is paying
A) a sunk cost which is consequently not a genuine cost at all. B) the cost of borrowing to purchase the house. C) the cost of constructing the house. D) the cost of purchasing the house. E) the cost of retaining ownership of the house.
An auction of the leases to drill for natural gas on about 55,000 acres on the Roan Plateau in western Colorado in August 2008 generated nearly $114 million, a record for onshore energy lease sales in the lower 48 states
Is natural gas a renewable or non-renewable resource? Why? A) Renewable, because the resource can be recycled B) Non-renewable, because the used resource cannot be reused C) Non-renewable, because the value of marginal product for natural gas is diminishing D) Renewable, because oil, natural gas, and coal are traded in global community markets
The figure above shows the demand and cost curves facing a price-setting firm. The maximum profit the firm can earn is ________.
A. $7,500 B. $8,000 C. -$1,500 D. $7,650 E. -$4,500