According to the relative version of purchasing power parity, when the inflation differential between the foreign country and the home country is positive

A. the inflation rate in the home country tends to decrease.
B. the domestic currency tends to appreciate.
C. the inflation rate in the home country overshoots.
D. the domestic currency tends to depreciate.


Answer: B

Economics

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Refer to Resource Supply/Demand. What does area D represent?

The following questions refer to the accompanying graph, which shows the supply and demand for a resource. The owner of the resource is receiving the price P0 and is providing the quantity Q0.

a. The value that Q0 units of the resource gives to demanders.
b. The revenue generated from selling Q0 units of the resource.
c. The rent that resource owner earns from providing Q0 units.
d. The minimum payment needed for the resource owner to supply Q0 units.

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If both supply and demand decrease by the same amount, the equilibrium price

A) does not change. B) rises. C) falls. D) cannot be predicted. E) None of the answers is correct because the price depends on what happens to the equilibrium quantity.

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One great challenge to choosing programs to fund is:

A. knowing whether the program is truly the cause of any observed improvement. B. raising the revenue to assess a program's viability. C. poor record keeping. D. All of these present large challenges.

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Suppose that good X is a luxury and that good Y is a necessity. Which good would you expect to have more price inelastic demand?

Economics