Suppose that the price of a plasma TV is $1,200 in the United States and 13,200 pesos in Mexico. If the current exchange rate is 10 pesos to the dollar, then purchasing power parity theory would predict that in the long run
A. the exchange value of the dollar will depreciate.
B. the exchange value of the peso will depreciate.
C. Mexico will begin to import plasma TVs from the United States.
D. the exchange value of the peso will appreciate.
Answer: B
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Refer to the payoff matrix below. In reference to the Nash equilibrium/equilibria in this game, which of the following is true?
Camp with Us and Happy Campers compete in the market for campers. Each firm must decide each season if they are going to offer special financing or not. The above payoff matrix shows each firm's net economic profit at each pair of strategies.
A) There is one Nash equilibrium in this game.
B) There are two Nash equilibria in this game.
C) There are no Nash equilibria in this game.
D) There are three Nash equilibria in this game.
What is the major difference between the classical model and the Keynesian model? Explain
What will be an ideal response?
In "closing the gold window" in 1971, President Nixon
a. did both d and e b. did all of the following c. refused to exchange gold for dollars d. forced the dollar to appreciate e. called in all gold circulating domestically
Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?
a. antitrust laws b. price discrimination c. doing nothing d. breaking up a natural monopoly into more than one firm