Assuming free trade between countries, exchange rates will change so that goods cost the same in all countries. This concept is known as the
a. long-run equilibrium theory.
b. exchange rate equalization theory.
c. interest rate parity theory.
d. purchasing power parity theory.
d
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Assuming all excess reserves are loaned out, currency holdings by the public are zero, and a reserve ratio of 20 percent, an initial deposit of $6,000 will lead to a total increase in deposits of
A) $12,000. B) $24,000. C) $30,000. D) $36,000.
When the interest rate on alternative investments rise, it becomes costly for the bondholders to retain their bonds with them
a. True b. False Indicate whether the statement is true or false
The benefit principle is the idea that people should pay taxes based on the benefits they receive from the services those taxes provide
a. True b. False Indicate whether the statement is true or false
The U.S. unemployment insurance program
A) decreases the level of frictional unemployment. B) pays the unemployed a benefit equal to twice the average wage. C) increases the amount of time the unemployed spend searching for a job. D) eliminates structural unemployment.