Purchasing power parity is criticized because it:
A. includes the trade in assets.
B. uses the wrong basket of goods to compute purchasing power parity exchange rates.
C. does not account for trade in assets.
D. does not apply when exchange rates are flexible.
Answer: C
You might also like to view...
The table above gives Cathy's total utility from Mt. Dew. If the price of a Mt. Dew is $2, Cathy's marginal utility per dollar from the 3rd Mt. Dew is ________ units per dollar
A) 20 B) 10 C) 32.5 D) 40
One way for a bank to deal with credit risk is to:
A. increase the number of loans made in any year. B. add a mark-up for a specific borrower based on the borrower's credit history to the cost of funds. C. charge all borrowers from the same industry an average rate for that industry. D. avoid making loans to borrowers from a broad spectrum and to specialize geographically and in specific industries.
A free market can be defined as a market structure where all exchanges are voluntary, and prices are free to fluctuate. Does a perfectly competitive market qualify as a free market?
What will be an ideal response?
Explain what guaranteed price matching means. What are the consequences of such a policy?
What will be an ideal response?