The major difference between absolute purchasing power parity (APPP) and relative purchasing power parity (RPPP) is:
a. APPP deals the equilibrium exchange rate for a basket of goods, and RPPP deals with changes in equilibrium exchange rate for a basket of goods.
b. APPP deals with changes in nominal exchange rates for a basket of goods, and RPPP deals with changes of exchange rates for a particular good.
c. APPP deals with the equilibrium exchange rate for one good, and RPPP deals with the equilibrium exchange rate for a basket of goods.
d. APPP deals with changes in nominal exchange rates for a basket of goods, and RPPP deals with levels of exchange rates for a particular good.
e. None of the above.
.A
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Refer to the figure above. If the yuan is allowed to float, at exchange rates above E yuan per dollar:
A) the excess supply of dollars in exchange for yuan increases the value of the dollar in the foreign exchange market. B) the excess supply of dollars in exchange for yuan lowers the value of the dollar in the foreign exchange market. C) the excess demand for dollars in exchange for yuan lowers the value of the dollar in the foreign exchange market. D) the excess demand for dollars in exchange for yuan increases the value of the dollar in the foreign exchange market.
When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly answers the ________ question
A) what B) how C) for whom D) where E) when
Explain why purchasing power parity measures of income levels tend to show a smaller difference between poor and rich countries
What will be an ideal response?
The IS curve becomes steeper if there is __________ in the interest-sensitivity of __________ demand
A) an increase; money B) an increase; investment C) a decrease; money D) a decrease; investment