The purchasing power parity theory is a good predictor of
a. all of the following
b. the long-run tendencies between changes in the price level and the exchange rate of two countries
c. interest rate differentials between two countries when there are strong barriers preventing trade between the two countries
d. how intervention in exchange markets by central banks influences prices in various countries
e. the day-to-day relationship between changes in the price level and the exchange rate of two countries
B
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Figure 9.1 shows three aggregate demand curves. A movement from curve AD1 to curve AD0 could be caused by a(n)
A) increase in government spending. B) decrease in taxes. C) increase in the price level. D) decrease in the money supply.
Some researchers have been unable to find evidence of increasing returns to human capital
Indicate whether the statement is true or false
If the price of a good is increased and total revenue received from the sale of this good increases, then the price elasticity of demand for the good is
A) elastic. B) inelastic. C) unitary. D) None of the above
The intent of contractionary fiscal policy is to:
A. Increase aggregate demand B. Decrease aggregate demand C. Increase aggregate supply D. Decrease aggregate supply