A widget costs $50 in the US and CAD$53 in Canada. The current exchange rate is 1USD=1.09CAD. Given purchasing power parity, the Canadian dollar would_______to equilibrate prices
a. Appreciate
b. Depreciate
c. Not change
d. None of the above
a
You might also like to view...
A linear total cost function implies that:
a. marginal costs are constant as output increases b. average total costs are continually decreasing as output increases c. a and b d. none of the above
The relative income hypothesis is associated with the ideas of
a. John M. Keynes b. Milton Friedman c. Franco Modigliani d. James Duesenberry e. Adam Smith
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
The closer the industry concentration ratio is to 100, the more likely it is that
A. there are a reasonably large number of medium-sized firms. B. this is an industry approaching perfect competition. C. there is a small number of large firms. D. price competition is being practiced.