If a dollar invested in the United States yields the same return as a dollar's worth of yen invested in Japan, then it implies that:

a. purchasing power parity exists.
b. the exchange market is in equilibrium.
c. the dollar/yen exchange rate is fixed.
d. interest rate parity exists.
e. both the currencies are pegged to a fixed amount of gold.


d

Economics

You might also like to view...

What tools can unions use to increase the demand for union labor?

What will be an ideal response?

Economics

Tax preparation services and IRS tax publications can be considered substitutes

a. True b. False

Economics

Explain why some economists believe an efficiency wage serves to make a business more profitable.

What will be an ideal response?

Economics

Soda companies pay universities for the exclusive right to sell their products on campus. For example, the University of Buffalo agreed to sell only Pepsi on campus in exchange for $220,000 per year. This agreement:

A. is harmful to students because the extra money gained by the university cannot be used for their benefit. B. may be beneficial for students, depending on how the university uses the $220,000. C. is beneficial for students if Pepsi charges a monopoly price on campus. D. is beneficial for students because they no longer have to make a choice about which soda to purchase.

Economics