Purchasing power parity does not hold in the short to medium run because
A. some goods aren't internationally traded.
B. exports don't equal imports.
C. most business cycles are caused by shocks to aggregate demand.
D. exchange rates fluctuate too much.
Answer: A
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In the circular flow diagram, the value of all the income in the economy is greater than the value of goods and services produced in the economy
Indicate whether the statement is true or false
Between 1870 and 1920, the U.S. labor force:
a. grew at about the same rate as the population. b. grew more rapidly than the population. c. fell despite rising population. d. grew at a slightly lower rate than the population.
The M1 money supply consists of:
a. only coins and currency held by the nonbank public b. certificates of deposit only. c. coins and currency held by the nonbank public, checkable deposits, and traveler's checks. d. money market mutual fund accounts, savings accounts, and other miscellaneous near-monies. e. only paper currency.
When the government imposes a tax on the production of a commodity:
a. production will invariably increase. b. the cost of production increases, so the supply curve shifts to the left. c. the benefits of consumption increases, so the demand curve shifts to the right. d. there is no change in demand or supply of the commodity. e. both the demand and supply curves shift to the right.