The major things to remember about relative purchasing power parity are:
a. Long-run changes in the value of a nation's currency value depend on the country's inflation rate relative to foreign nations, and short-term exchange rate changes depend mainly on interest parity relationships.
b. The higher a nation's relative inflation, the higher its currency value will be, and long-run changes in the value of a nation's currency value depend mainly on the country's inflation rate relative to foreign nations.
c. The higher a nation's relative inflation, the lower its currency value will be, and long-run changes in the value of a nation's currency value depend on the country's inflation rate relative to foreign nations.
d. Changes in relative international money supplies are the major cause of short-run exchange rate movements, and long-term exchange rate changes depend mainly on interest parity relationships.
e. None of the above
.C
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The long-run average cost curve of a natural monopoly
A) is positively sloped until it crosses the demand curve. B) intersects the demand curve while it is negative sloped. C) intersects the demand curve while it is positively sloped. D) is the natural monopoly's supply curve. E) is the same as the natural monopoly's demand curve.
Assortative mating results in
A) many people being able to marry their way out of poverty. B) wealth becoming more concentrated among families. C) the Lorenz curve moving rightward closer to the line of equality. D) people marrying at a later age.
The flow of capital results from the changes or differences in interest rates among countries
Indicate whether the statement is true or false
Forward-looking households may reduce consumption expenditures today if they believe that the government is currently
A) borrowing to run a budget deficit, and to pay back these loans in the future may require higher taxes. B) running a budget surplus, and the increase in the government's supply of money will generate inflation in the future. C) experiencing a balanced budget, and will therefore not be implementing any fiscal policy to stabilize the economy. D) cutting federal spending to decrease the budget deficit, which will raise the real interest rate, the inflation rate , and the unemployment rate.