A principal reason that purchasing power parity does not hold exactly in practice is
A) that foreign and domestic assets are not perfect substitutes.
B) the existence of non-traded goods.
C) that consumers in different countries have different preferences.
D) that costs of production are not the same in all countries.
B
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Which of the following changes would lead, according to the Solow model, to a higher level of long-run output per worker?
A) A lower level of capital per worker B) An increase in the saving rate C) A rise in the rate of population growth D) A decrease in productivity
Under current guidelines, the U.S. Department of Justice usually challenges
a. all mergers b. mergers in industries that would have a postmerger Herfindahl index greater than 1,800 c. mergers in industries that would have a postmerger Herfindahl index greater than 1,800 if the Herfindahl index increases by more than 100 points d. mergers in industries that would have a postmerger Herfindahl index greater than 1,000 e. mergers in industries that would have a postmerger Herfindahl index greater than 1,000 if the Herfindahl index increases by more than 100 points
The derivative, dAC(Q)/dQ = (1/Q2) {Q(dC/dQ) ? C(Q)}, illustrates that when:
A. MC(Q) < AC(Q), average costs increase as output increases. B. MC(Q) > AC(Q), average costs decrease as output increases. C. MC(Q) < AC(Q), average costs decrease as output increases. D. None of the answers are correct.
Explain the logic behind the First Theorem of Welfare Economics
What will be an ideal response?