Purchasing power parity refers to
A. adjustments in exchange rate conversions that take into account differences in inflation rates across countries.
B. calculating real, per capita GDP in dollars.
C. adjustments in exchange rate conversions that take into account the differences in true cost of living across countries.
D. adjustments in GDP figures to put everything into one common currency for comparison sake.
Answer: C
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Suppose the two countries can trade shares in the ownership of their perspective assets. Further, assume that a Home owner of a 10 percent share in Foreign land
He will receive 10 percent share in Foreign land, and thus receives 10 percent of the annual Foreign kiwi fruit harvest. Further assume that a Foreign owner of a 10 percent share in Home land is permitted. In this case, a Foreigner is entitled to 10 percent of the Home harvest. Calculate the expected value of kiwi fruit for each investor. Is the investor better off?
When leisure is a normal good, the income effect from a decrease in wages is evident in
a. a desire to consume more leisure. b. a desire to consume less leisure. c. an upward-sloping labor-supply curve. d. a shift in labor demand.
What condition causes a secondary market to arise?
Please provide the best answer for the statement.
For this question, assume that policy makers are pursuing a fixed exchange rate regime. Now suppose that households decide to decrease consumption because of, for example, a reduction in consumer confidence. Given this information, we would expect which of the following to occur?
A) a reduction in the domestic interest rate B) an increase in E C) a reduction in E D) a reduction in investment E) none of the above