Suppose a basket of goods costs $400 in the United States and £200 in Britain. If the exchange rate is $1/pound, what will happen in the foreign exchange market, according to the purchasing power parity theory?
a. The market will go further out of equilibrium because of increased activity.
b. An increase in demand for pounds will lead to an increase in the price of pounds.
c. An increase in demand for dollars will lead to an increase in the price of dollars.
d. An increase in demand for dollars will lead to a decrease in the price of dollars.
e. An increase in demand for pounds will lead to a decrease in the price of pounds.
B
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Full employment is not considered to be zero unemployment, because
A) some people do not want a job. B) people do not find jobs instantaneously. C) some cyclical unemployment always exists. D) there are not enough jobs for everyone who wants one.
Use national demand and supply curves to show (a) the incentives for trade to begin between nations. (b) the effect on the likely pattern of trade of a change in technology in A that causes A's national supply curve to shift out
(c) the effect on the likely pattern of trade of a change in tastes in B in favor of good S.
Show Stoppers is a monopoly provider of ticket services for the concerts and sporting events and their current service charge is $10.00 . In order to attract one more customer, they have to lower their service charge to $9.50 . Show Stoppers' marginal revenue of this additional customer is: a. $9.50
b. greater than $9.50. c. less than $9.50. d. between $10.00 and $9.50.
A high marginal propensity to consume implies which of the following?
A) A small change in consumption when income changes B) A high savings rate C) A high marginal tax rate D) An equilibrium level of income near full employment E) A low marginal propensity to save