The law of one price (LOOP) indicates that:
a. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country.
b. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country.
c. The quantity produced of a good in one country should be equal to the exchange-rate-adjusted quantity produced of the same product in another country.
d. None of the above.
e. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits.
.B
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Endogenous growth theory is about
A) welfare of indigenous people. B) explaining growth. C) studying education. D) studying fertility choices.
Job candidates during a job search will seek to provide employers with ______ but avoid providing _____:
A. positive signals; negative signals. B. as much information as possible; private information. C. negative signals; positive signals. D. truthful information; false information.
Mutual interdependence applies to actions of
a. monopolistic competitors b. oligopolists c. perfect competitors d. monopolists and oligopolists e. only oligopolist firms operating in different industries