Which of the following does purchasing-power parity imply?
a. the foreign price level times the nominal exchange rate (given as amount of foreign currency per dollar) equals the U.S. price level.
b. The price of domestic goods relative to foreign goods cannot change.
c. The nominal exchange rate is the ratio of foreign prices to U.S. prices.
d. All of the above are correct.
c
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The above figure shows the market for pizza. The market is in equilibrium when the cheese used to produce pizza falls in price. What point represents the most likely new price and quantity?
A) A B) B C) C D) D E) E
In evaluating a relationship between x and y, ceteris paribus means other variables
A) are not relevant to x and y. B) move in opposite directions to x and y. C) are not changing while x and y change. D) move in the same direction as x and y.
If a brewery wants to raise funds to purchase a new fermenting vat, it does so in the
A) alcoholic beverages market. B) output market. C) factor market. D) product market.
An example of a one-time expense for a shoe factory would be buying:
A. leather to make the shoes, and would be excluded from total cost. B. leather to make the shoes, and would be included in total cost. C. a sewing machine, and would be included in total cost. D. a sewing machine, and would be excluded from total cost.