Based on the theory of purchasing power parity, in the long run, currencies of countries with significant inflation will tend to:
A. be flexible.
B. depreciate.
C. appreciate.
D. have nominal exchange rates.
Answer: B
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If an economy initially starts away from the steady state ________
A) output will gradually fall over time B) the economy will converge to the steady state in the long-run C) consumption spending must be greater than investment spending D) consumption spending must rise
A cost center is
a. evaluated based on minimizing costs within the division b. evaluated based on maximizing costs within the division c. evaluated based on minimizing profits generated by the division d. evaluated based on maximizing profits generated by the division
A government's policy of redistributing income makes the income distribution
a. more equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient. b. more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient. c. less equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient. d. less equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.
Critics of the World Bank's analysis of East Asian industrial policies argue that
A) even though growth was faster in the non-targeted industries than it was in the targeted ones, the policies were essential to overall economic growth. B) growth was faster in nearly every targeted industries than it was in the non-targeted ones. C) even though growth was the same in the targeted industries as it was in the non-targeted ones, they would have grown slower without the policies. D) growth was slower in the targeted industries; hence the policies did not work.