Suppose that a U.S. dollar buys more gold in Australia than it buys in Russia. What does purchasing-power parity imply should happen?
People can make a profit by buying gold in Australia and selling it in Russia. Purchases in Australia drive down the amount of gold a dollar can buy there. Sales in Russia drive up the amount of gold a dollar can buy there. Purchasing-power parity theory claims that this should continue until the dollar can buy the same amount of gold anywhere.
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Courts generally use the ________ when determining the value of human life in wrongful death suits
A) compensating differential approach B) actuarial approach C) lost-income approach D) sentimental approach
Which of the following allows us to compare average levels of real production per person in different nations in a way that adjusts for differences in true costs of living?
A. per capita nominal GDP based on foreign exchange rates B. nominal GDP based on purchasing power parity C. per capita real GDP based on purchasing power parity D. real GDP based on foreign exchange rates
If the price of gasoline rises sharply and the demand for trucks falls, then the two goods are
A) complements. B) normal goods. C) substitutes. D) inferior goods.
According to the new Keynesian sticky-price theory, a rise in aggregate demand results in ________ price level in the near term and in ________ price level in the longer term.
A. a lower; an unchanged B. a lower; a higher C. a higher; an unchanged D. an unchanged; a higher