According to the theory of purchasing power parity, if the inflation rate in England is greater than the inflation rate in Japan,
A) the law of one price has been violated.
B) the nominal value of the pound will appreciate against the yen.
C) the nominal value of the yen will appreciate against the pound.
D) the nominal value of the pound will appreciate against the yen, but only if the two countries are on the gold standard.
C
You might also like to view...
According to Keynes, the "stickiness" of wage rates could best be explained by
A) short-term labor contracts. B) minimum wage laws. C) unions and long-term labor contracts. D) government interference.
The "law of diminishing marginal returns" applies to:
A) the short run, but not the long run. B) the long run, but not the short run. C) both the short run and the long run. D) neither the short run nor the long run.
When shopping for a ticket to see One Direction, her favorite band, in concert, Annie mistakenly purchased a non-refundable ticket to the off-off-off Broadway play "One Dissection," which she has no interest in seeing. Because the ticket cost her $100, Annie decides to think about it:
A. rationally and sits through the play she has the ticket for, which is as awful as she thought it might be. B. irrationally and skips the play and spends another $100 on the concert ticket. C. rationally and skips the play and spends another $100 on the concert ticket. D. None of these is a possible outcome.
The aggregate demand curve tends to be
a. vertical. b. horizontal. c. upward sloping. d. downward sloping.