If the purchasing power of a dollar is greater than the purchasing power of the yen, purchasing power parity would predict that
A) in the short run, interest rates will move to equalize the purchasing power of the dollar and the yen.
B) in the long run, exchange rates will move to equalize the purchasing power of the dollar and the yen.
C) in the short run, exchange rates will move to equalize the purchasing power of the dollar and the yen.
D) in the long run, interest rates will move to equalize the purchasing power of the dollar and the yen.
B
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A nation's net exports consist of
A) its exports plus its imports. B) its exports plus all other nation's imports. C) its exports minus its imports. D) its imports plus all other nation's exports.
If inflation in Mexico is lower than it is in the United States,
A) the purchasing power of the dollar in buying American goods will rise relative to the peso. B) the value of the peso will rise in the long run. C) the value of the dollar will rise in the long run. D) the purchasing power of the peso in buying Mexican goods will fall relative to the dollar.
Successful price discrimination cannot take place if
A) customers are not able to resell the product. B) the market is perfectly competitive. C) the demand curve facing the firm is downward sloping. D) the market can be segmented into different buyer groups.
When new farmers enter the wheat industry, the equilibrium price of wheat
a. always falls. b. falls only if existing firms gang up on the entrant. c. falls only if existing firms are earning no economic profit. d. falls only if the new firm is more efficient than existing firms.