Which of the following statements is true about purchasing power parity (PPP)?
a. PPP is the normal state between two nations because international markets are perfectly competitive.
b. PPP is the normal state between two nations because of government regulations and central bank intervention.
c. PPP is the normal state between two nations because interest rates, the spot exchange rate, and the forward exchange rate all adjust to create this condition.
d. PPP is the normal state between two nations because arbitrageurs take advantage of any imbalances.
e. PPP is rarely the case for most nations in the short-run, but exchange rates tend to move in the direction of PPP in the long run.
.E
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In 2017, about what percentage of goods and services sold in the United States was imported?
A. 5 percent B. 15 percent C. 22 percent D. 88 percent
The social cost of producing a good that generates negative externalities is the sum of the ________
A) average variable cost and average fixed cost of production B) average total cost and the marginal cost of production C) private cost and external costs of production D) total fixed cost and total variable cost of production
The term "fine-tuning the economy" implies: a. making government economic policy more "people oriented"
b. using government policies to adjust the economy and promote economic stability. c. solving microeconomic problems such as externalities and losing sight of the big picture. d. placing fewer regulations on the private sector, thereby eliminating the need for government intervention. e. designing policies based exclusively on leading economic indicators.
If changing the quantity produced from 10,000 to 10,001 causes total costs to increase by $15, the marginal cost at 10,000 must be $15
Indicate whether the statement is true or false