Suppose a basket of internationally traded goods that sells for $10,000 in the United States sells for €8,000 in the euro zone. According to purchasing power parity theory, the equilibrium exchange rate should be
a. $2.50 per euro
b. $1.50 per euro
c. $1.25 per euro
d. $1.00 per euro
e. $.50 per euro
A
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A marginally attached worker is
A) a person who is not happy with his or her job. B) someone who works part-time more than 25 hours per week but wants full-time work. C) someone who does not have a job but is available and willing to work and has made specific but unsuccessful efforts to find a job during the past 4 weeks. D) someone who does not have a job but is available and willing to work but has not made specific efforts to find a job during the past 4 weeks. E) another name for an unemployed worker.
The Keynesian theory is consistent with the business cycle fact that inflation is
A) procyclical and leading. B) procyclical and lagging. C) countercyclical and leading. D) countercyclical and lagging.
The above figure shows a graph of the market for pizzas in a large town. At a price of $14, there will be
A) no pizzas supplied. B) equilibrium. C) excess supply. D) excess demand.
If an excise tax is placed on a product that has a perfectly inelastic demand, then:
A. the entire tax will be paid by the consumer. B. the entire tax will be paid by the producer. C. the consumer and producer will each pay a share of the tax. D. the incidence of the tax cannot be determined unless we know the coefficient of price elasticity of supply.