Suppose that on Monday, a Big Mac cost $3.00 in the United States and 320 Japanese yen in Japan. On Monday, the exchange rate was $1 = 90 yen. According to the purchasing power parity theory, the yen was __________ by approximately __________ percent
A) overvalued; 22
B) undervalued; 40
C) overvalued; 29
D) undervalued; 19
E) overvalued; 19
D
You might also like to view...
A price ceiling is
A) the lowest price a seller can charge without losing all of its customers. B) a legal minimum price below which a good or service cannot be sold. C) a legal price above which a good or service cannot be sold. D) a nonprice rationing device.
According to the rule of 72, if you have $15,000 in an account that grows at the rate of 12 percent annually, it will take approximately six years for the $15,000 to double to $30,000
a. True b. False Indicate whether the statement is true or false
Suppose the central bank of a country announces that interest rates will remain between 1 and 2 percent for the next 2 years. This is an example of:
a. open market operations. b. deficit financing. c. forward guidance. d. quantitative easing.
Keynesians
A. believe capitalism is inherently stable. B. believe the markets in a capitalistic economy are highly competitive. C. argue against the use of discretionary monetary policy. D. contend that government intervention in the economy is desirable.