If purchasing power parity tells us that if the exchange rate is a pound for a dollar, then price of a haircut in London should cost the same as a haircut in New York
Indicate whether the statement is true or false
FALSE
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Economists use models in order to
A. experiment with alternative circumstances. B. make educated guesses about real-life events. C. predict outcomes under various hypothetical conditions. D. increase understanding of how a relationship actually works. E. All of these responses are correct.
As economic similarity rises, the stability costs of a common currency decrease because there are:
A) more asymmetric shocks. B) fewer asymmetric shocks. C) no asymmetric shocks. D) no symmetric shocks.
If demand for a good increases and supply remains constant equilibrium price:
a. Will increase, and equilibrium quantity will decrease b. And quantity will both increase c. And quantity will both decrease d. Will decrease, and equilibrium quantity will increase
What is the primary function of the Term Asset-Backed Securities Loan Facility?
A. Provide funding support for collateralized securities such as student, auto, and credit card loans. B. Provide securities loans to primary dealers for one-month terms. C. Provide overnight loans to primary dealers willing to post loan-backed securities as collateral. D. Provide loans to U.S. financial institutions to purchase commercial paper.