If a basket of goods costs $10 in the United States and 100,000 rubles in Russia, then purchasing power parity will exist if the exchange rate between the ruble and the dollar is:
A. 0.1 dollars per ruble.
B. 1,000 rubles per dollar.
C. 0.01 dollars per ruble.
D. 10,000 rubles per dollar.
Answer: D
You might also like to view...
Suppose an individual faces a decision of whether or not to make an investment 2 years from now. The investment will cost $10,125, and it will yield a benefit b 2 years later. a. Suppose the individual treats a dollar 1 year from now the same way as $0.90 now. How low can b be for this individual to plan to make the investment in two years?
b. Now suppose that the individual's tastes are better characterized by the beta-delta model. Suppose delta is 0.9. For what values of beta will the individual plan the same course of action 2 years from now as he would in the typical delta model (with the same delta)? c. Suppose beta is 0.9 (with delta also equal to 0.9). How low can b be in order for the individual to be willing to undertake the investment when he faces the choice in 2 years? d. For what range of values for b does the individual from (c) plan to undertake the investment but then decides not to when the time comes? What will be an ideal response?
"Rising prices" and "rising inflation" mean the same thing
a. True b. False
The multiplier principle illustrates that
a. an increase in investment spending will be multiplied into a larger increase in GDP. b. an increase in GDP will be multiplied into a larger amount of investment spending. c. an increase in GDP will be multiplied into a larger increase in consumer spending. d. investment spending is always a multiple of consumer spending.
Which of the following is an example of positive rate of time preference?
a. buying a movie ticket the night the movie comes out b. waiting to read your favorite book until it comes out in paperback c. waiting until the new model of the car you want comes out d. none of the above are examples of the positive rate of time preference