The purchasing power parity theory of exchange rate determination maintains that
a. the exchange rate between two nations' currencies is determined by the percent of gold that backs each nation's currency.
b. the exchange rate between two nations' currencies adjusts to reflect differences in the price levels in the two nations.
c. in the short run, exchange rates are determined by central bank intervention in the currency markets.
d. the exchange rate between two currencies is determined by the debt that each nation owes to the World Bank.
b
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What is GATT and what happened to tariff rates as a result of GATT?
What will be an ideal response?
The market supply curve
a. is found by vertically adding the individual supply curves. b. slopes downward. c. represents the sum of the prices that all the sellers are willing to accept for a given quantity of the good. d. represents the sum of the quantities supplied by all the sellers at each price of the good.
The price of bananas will increase in response to:
A. an increase quantity of bananas supplied. B. an excess demand for bananas. C. an excess supply of bananas. D. an increase in the supply of bananas.
If the economy were producing at its potential output, then the unemployment rate would be less than the target rate of unemployment.
Answer the following statement true (T) or false (F)