During 2011, the price level in the U.S. rose at a faster rate than the price level in Japan. Other things the same, according to purchasing-power parity, this difference in inflation rates should have caused

a. the nominal exchange rate of the dollar to appreciate relative to the yen.
b. the real exchange rate of the dollar to appreciate relative to the yen.
c. the nominal exchange rate of the dollar to depreciate relative to the yen.
d. the real exchange rate of the dollar to depreciate relative to the yen.


c

Economics

You might also like to view...

A temporary embargo on oil from the Middle East going in to the United States would

A) shift both the short-run and long-run aggregate supply curves to the left. B) shift only the short-run aggregate supply curve to the left. C) shift the long-run aggregate supply curve to the right. D) shift only the long-run aggregate supply curve to the left.

Economics

If nominal GDP increases this year, then real GDP

A) could either increase or not change but cannot decrease. B) must decrease. C) must increase. D) must not change. E) could increase, decrease, or not change.

Economics

If the marginal cost curve is below the average variable cost curve, then

A) average variable costs are increasing. B) average variable costs are decreasing. C) marginal cost must be decreasing. D) average variable costs could either be increasing or decreasing.

Economics

The multiplier means that the response to monetary policy is completed immediately.

Answer the following statement true (T) or false (F)

Economics