Suppose a Starbucks tall latte costs $4.00 in the United States and 2.50 euros in the Euro area. Also, suppose a McDonald's Big Mac costs $4.50 in the United States and 3.60 euros in the Euro area. If the nominal exchange rate is .80 euros per dollar, which goods have prices that are consistent with purchasing-power parity?
a. both the tall latte and the Big Mac
b. the tall latte but not the Big Mac
c. the Big Mac but not the tall latte
d. neither the Big Mac nor the tall latte
c
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Skill-biased technological has different effects on the marginal products of ________ workers and ________ workers.
A. higher-skilled; lower-skilled B. government; private-sector C. male; female D. union; nonunion
The figure illustrates aggregate demand and aggregate supply in Sparta. Which of the following events will decrease Sparta's real GDP in the short run?
A) a decrease in taxes B) a fall in resource prices C) a decrease in government expenditure D) an increase in investment
In a repeated game, deterring entry
A) is not possible. B) is not a rational strategy if money is lost fighting the first potential entrant. C) may require losing money fighting the first potential entrant. D) cannot form a subgame perfect Nash equilibrium.
Which of the following is not held constant in a supply schedule?
a. production technology b. the price of the good c. the prices of inputs d. expectations