A basket of goods cost $800 in the U.S. The same basket of goods costs $1,000 in France and the exchange rate is .80 euros per dollar. The same basket of goods costs 960 Australian dollars and the exchange rate is 1.2 Australian dollars per U.S. dollar. Purchasing power parity with the U.S. holds in
a. both France and Australia
b. France but not Australia
c. Australia but not France
d. neither France nor Australia
c
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In 2008 the money wage rate in Ireland increased by 4 percent while the price level increased by 8 percent. As a result, Ireland's
A) short-run aggregate supply curve shifted leftward. B) short-run aggregate supply curve shifted rightward. C) long-run aggregate supply curve shifted rightward. D) short-run and long-run aggregate supply curves shifted rightward.
Refer to Table 9-1. The labor force participation rate for this simple economy equals
A) (1,100/20,000 ) × 100. B) (1,000/15,000 ) × 100. C) (1,100/15,000 ) × 100. D) (1,000/1,100 ) × 100.
Joseph has the utility function U(F,H) = 10F2H, where F is the quantity of food he consumes per year and H is the quantity of housing per week. Suppose the price of food is $10 and the price of housing is $5, while Joseph has an income of $150/week
a. Calculate Joseph's MRS as a function of the quantities F and H. b. Write out Joseph's constrained optimization problem with the information provide d. c. Using the substitution method, solve for Joseph's optimal consumption bundle of food and housing. d. Show that at the optimum, Joseph consumes the bundle along the budget constraint where MRS = MRT.
If the overall price level decreases, then the aggregate demand curve will shift to the right
a. True b. False Indicate whether the statement is true or false