PPP is a theory of real exchange rate determination
Indicate whether the statement is true or false
TRUE
Explanation: It is only an equilibrium relationship between two endogenous variables. Prices and exchange rates are simultaneously determined by other factors such that the former do not cause the latter to change.
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The components of a well-run incentive compensation scheme include all of the following EXCEPT
a. evaluating the identified performance measures b. demonstrating that supervisors are friendly outside of the work environment c. rewarding workers who for meet performance measures d. identifying the relevant measures on which to evaluate employees
If a nonbinding price ceiling is imposed on a market, then the
a. quantity sold in the market will decrease. b. quantity sold in the market will stay the same. c. price in the market will increase. d. price in the market will decrease.
According to the textbook, income inequality statistics can be misleading because
A) they are collected by the Census Bureau, whose objectivity cannot be trusted.
B) they ignore the income mobility of individual families and households through time.
C) they do not take into account inflation.
D) they fail to be of use in policy proposals and debates.
Changes in the price level don't affect the unemployment rate if
A. the aggregate supply curve is flat. B. the aggregate demand curve is steep. C. the economy is operating below capacity. D. the economy is operating at capacity.