Empirical evidence shows that in the short run, purchasing power parity ________, and in the long run, purchasing power parity ________.
A. holds; does not hold
B. does not hold; holds
C. holds; holds
D. does not hold; does not hold
Answer: B
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Which of the following statements is not correct about the 1920s?
a. There was an increased use of advertising. b. There was a significant increase in travel and the building of highways. c. There were many innovations in the automobile sector. d. The rapid increases in income reduced the use of credit.
Fluctuations around the long-term growth rate are called:
A. depressions. B. recessions. C. expansions. D. business cycles.
If more international tourists visited the United States, this would
A. lower the U.S. merchandise trade imbalance. B. lower the U.S. overall trade imbalance. C. raise the U.S. merchandise trade imbalance. D. raise the U.S. overall trade imbalance.
The terms of trade (TOT) is defined as
A) (index of export prices)/(index of import prices). B) (home-country currency)/(foreign-country currency). C) . D)