The Big Mac index:
A. is measured by The Economist.
B. is a simple measure that indicates differing costs of living in different countries.
C. converts the price of a Big Mac worldwide to dollars, and compares it to how much they cost in the U.S.
D. All of these statements are true.
D. All of these statements are true.
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How might a budget deficit affect the balance of trade?
A) A budget deficit reduces interest rates, which reduces exchange rates and reduces the balance of trade. B) A budget deficit raises interest rates, which raises exchange rates and reduces the balance of trade. C) A budget deficit raises interest rates, which raises exchange rates and increases the balance of trade. D) A budget deficit reduces interest rates, which raises exchange rates and reduces the balance of trade.
The distribution of wealth is more unequal than the distribution of income because wealth reflects
a. persistent wage differentials between people of different abilities b. physical assets as opposed to financial assets c. unequal distribution of talents in the population d. unequal access to education e. the distribution of lifetime accumulated assets
Which system is the most difficult to maintain if you are running a trade deficit?
A. The free market exchange rate system B. The managed float exchange rate system C. The fixed exchange rate system D. The floating exchange rate system
Doug is currently not employed. He places a value of $16 an hour on his time in nonmarket activities. If Doug is offered a job paying $12 an hour
A. he should supply a positive number of hours in the labor market and to nonmarket activities. B. he is indifferent between supplying hours to the labor market and using his time in nonmarket activities. C. he should supply 0 hours in the labor market. D. he should supply a positive number of hours in the labor market and allocate no time to nonmarket activities.