The authors state that empirical tests of purchasing power parity "have, for the most part, not proved PPP to be accurate in predicting future exchange rates."
The authors then state that PPP does hold up reasonably well in two situations. What are some reasons why PPP does not accurately predict future exchange rates, and under what conditions might we reasonably expect PPP to hold?
What will be an ideal response?
Answer: PPP does not hold because goods and services do not move without cost between countries and markets. Often, goods and services are nor perfect substitutes in every market for reasons of availability, taste, quality, and production techniques. Having said that, PPP does appear to work reasonably well over the long run and especially in countries with higher rates of inflation and underdeveloped capital markets.
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Which of the following statements is CORRECT?
A. Some of the cash flows shown on a time line can be in the form of annuity payments, but none can be uneven amounts. B. A time line is not meaningful unless all cash flows occur annually. C. Time lines are not useful for visualizing complex problems prior to doing actual calculations. D. Time lines cannot be constructed in situations where some of the cash flows occur annually but others occur quarterly. E. Time lines can be constructed for annuities where the payments occur at either the beginning or the end of the periods.
Give five examples of mechanisms used by organizations to embed its culture.
What will be an ideal response?
There are three closing entries. The first one is to close ____, the second one is to close ____, and the last one is to close ____
A) revenues, expenses, dividends B) expenses, assets, capital stock C) capital stock, dividends, assets D) dividends, expenses, assets
______ are people who start several businesses, sometimes at the same time or sometimes one after the other.
a. Social entrepreneurs b. Serial entrepreneurs c. High-risk entrepreneurs d. Low-risk entrepreneurs