Which of the following statements is correct?
A) PPP is a theory of exchange rate determination.
B) Inflation differentials cause changes in exchange rates.
C) PPP is an equilibrium relationship between two endogenous variables.
D) PPP, or the law of one price, should hold well for individual goods.
C
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In Lithasia, the opportunity cost of producing a chair is two tables and in Barylia, the opportunity cost of producing a chair is 1/2 table. Which of the following statements is true?
A) Barylia has a comparative advantage in producing chairs. B) Lithasia has a comparative advantage in producing chairs. C) Barylia has a comparative advantage in producing tables. D) Lithasia has a comparative disadvantage in producing tables.
According to adaptive expectations theory, expansionary monetary and fiscal policies to reduce the unemployment rate are:
a. useless in the long run. b. useless in the short run. c. ineffective on the price level. d. None of these.
If the U.S. economy was close to full employment in May? 2017, why was the? U-6 measure of the unemployment rate still as high as? 8.6?
What will be an ideal response?
If demand is represented as Qd = 24 - P and supply is represented as Qs = 6 + 2P, the equilibrium quantity is
A. 3. B. 6. C. 10. D. 18.