If relative PPP held, then the real exchange rate must be equal to one
Indicate whether the statement is true or false
FALSE
Explanation: If relative PPP held, then the real exchange rate must be equal to a constant number.
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According to the special interest theory,
a. economic regulation is designed to promote social welfare b. producers may be able to influence regulators to impose restrictions favorable to producers c. groups of consumers with special interests may be able to control a regulatory agency to their own benefit d. foreign lobbyists may be able to control a regulatory agency to their own benefit e. the fighting between special interest groups over economic regulation may cancel out effects of such regulation
The structural unemployment rate is 3.1 percent, the frictional unemployment rate is 2.1 percent, and the current unemployment rate is 6.0 percent. The economy is in
A) a recessionary gap producing less than Natural Real GDP. B) an inflationary gap producing more than Natural Real GDP. C) long-run equilibrium. D) an inflationary gap producing Natural Real GDP. E) a recessionary gap producing more than Natural Real GDP.
Businesses in the United States cut their investment projects by $30 billion. If the MPC is 2, what will be the impact on the national income (Y)?
A. Y will fall by $15 billion. B. Y will fall by $30 billion. C. Y will fall by $60 billion. D. Y will fall by $120 billion.
A nation's trade deficit will expand when its:
a. currency appreciates. b. economy is shrinking. c. investment environment is less attractive to foreigners. d. all of these are true.