According to the table, the price of Big Macs converted to U.S. dollars varies widely around the world. This shows that Big Mac pricing does NOT follow the theory of
A) Ricardian equivalence. B) purchasing power parity.
C) supply and demand. D) real versus nominal prices.
B
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Under Purchasing Power Parity
A) E$/E = PUS/PE. B) E$/E = PE/PES. C) E$/E = PUS + PE. D) E$/E = PUS - PE. E) E$/P = PUS/PE.
Open market purchases and sales are conducted at the:
A) Federal Reserve Bank of Kansas City. B) Federal Reserve Bank of New York. C) Federal Reserve Bank of Chicago. D) Federal Reserve Bank of St. Louis.
Why has the Federal Reserve chairman often been called the second most important person in terms of affecting the economy?
A) The Fed chairman has veto power over all federal spending. B) The Fed is in control of monetary policy. C) The Fed chairman draws the second highest salary of any official of the federal government. D) The Fed has regulatory power over all financial markets.
If the long-run supply curve in a perfectly competitive industry is upward sloping, this is because
A) firms are different. B) firms are identical. C) input prices rise as the industry expands. D) Either A or C.