Which of the following is NOT an implication of the theory of purchasing power parity?
A) Exchange rates move to equalize the purchasing power of different currencies.
B) Exchange rates should be at a level that makes it possible to buy the same amount of goods and services with the equivalent amount of any country's currency in the long run.
C) A country with a higher inflation rate should experience an appreciation of its currency.
D) The real exchange rate should equal one.
C
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The tax-or-subsidy approach for solving externality problems was developed by
A. Ronald Coase. B. Arthur Pigou. C. Bertil Ohlin. D. Eli Heckscher.
People tend to track consumption by the bundles in which a product is delivered rather than the actual consumption of the product.
Answer the following statement true (T) or false (F)
When the price of a product decreases, the marginal revenue product curve in a perfectly competitive market
A. becomes steeper. B. shifts to the left. C. shifts to the right. D. does not change.
Money is:
A. a proven cognitive bias. B. not fungible, meaning it can be easily exchanged or substituted. C. an alternative to implicit costs. D. fungible, meaning it is easily exchangeable or substitutable.