The purchasing power parity theory is not a good explanation of how nominal exchange rates are determined in the short run because:
A. there is no evidence that low inflation is associated with less rapid nominal exchange rate depreciation.
B. most goods and services are traded internationally and are standardized.
C. most nominal exchange rates are fixed and foreign exchange markets do not bring the supply and demand for currencies into equilibrium.
D. many goods and services are not traded internationally and not all internationally-traded goods are standardized.
Answer: D
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Property rights assure people that
A) the government will not confiscate their income or savings. B) the government will provide a minimum standard of living. C) the factors of production and goods are owned jointly by the government and the people. D) economic growth will enhance government involvement in the economy. E) international trade will be limited.
A monopolist would charge ____ prices and produce ____ output than would exist under perfect competition. a. higher; less
b. lower; more. c. higher; more. d. the same; the same.
Points inside (below) the production possibilities frontier (PPF) are
What will be an ideal response?
Which of the following is heavily subsidized by state and local governments?
A) Medicare B) Social Security C) public education D) food stamps