The theory that nominal exchange rates are determined so that the law of one price holds is called:
A. the law of supply and demand.
B. the equilibrium principle.
C. purchasing power parity.
D. the fixed-exchange-rate rule.
Answer: C
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In which of the following situations is there most likely to be a monopsony?
A) the market for farm workers in a large rural area B) the market for advertising executives in New York City C) the market for accountants in New York City D) the market for NBA players drafted out of college by one NBA team
The difference between M1 and M2 is given by which of the following?
a. M1 includes currency, coins, gold and silver, whereas M2 does not contain gold and silver. b. M1 is made up of currency, traveler's checks, and money in checkable accounts, whereas M2 contains M1 plus savings deposits and time deposits. c. M1 is limited to currency, whereas M2 contains M1 plus traveler's checks and money in checkable accounts. d. M1 includes currency and traveler's checks, whereas M2 contains M1 plus money in checking accounts.
Which of the following is not an example of a natural resource?
A. River B. Forest C. Coal deposit D. Piece of machinery
The current deficit minus net interest is called the
A. net current deficit. B. primary deficit. C. current surplus. D. primary current deficit.