If the exchange rate is equal to the ratio of the domestic and foreign price indexes,
A) absolute PPP holds.
B) relative PPP holds.
C) one currency is said to be overvalued.
D) one currency is said to be undervalued.
A
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As long as debt grows by the same percentage as nominal GDP, the debt-to-GDP ratio will stay constant but the interest payments-to-GDP ratio will increase
a. True b. False
In the open-economy macroeconomic model, if the supply of loanable funds shifts right, then
a. net capital outflow increases so the demand for dollars in the market for foreign-currency exchange shifts right. b. net capital outflow increases so the supply of dollars in the market for foreign-currency exchange shifts right. c. net capital outflow decreases so the demand for dollars in the market for foreign-currency exchange shifts left. d. net capital outflow decreases so the supply of dollars in the market for foreign-currency exchange shifts right.
The reason the marginal cost curve eventually increases as output increases for the typical firm is because of
A. diseconomies of scale. B. increasing opportunity cost. C. diminishing marginal returns. D. diminishing marginal utility.
A monopolist maximizes profit by producing
a. At MR= rising MC b. At MR>MC c. At P=MR d. At MC=0