The idea behind the "Big Mac index" is a test of
a. interest rate parity theory.
b. long-run equilibrium theory.
c. purchasing power parity theory.
d. exchange rate equalization theory.
c
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Refer to Figure 7-2. Without the tariff in place, the United States consumes
A) 12 million pounds of coffee. B) 26 million pounds of coffee. C) 33 million pounds of coffee. D) 45 million pounds of coffee.
Think about the following news items and label each as involving a what, how, or for whom question:
What will be an ideal response?
Mercantilism held that
A) silver alone was the mainstay of national wealth. B) gold alone was the mainstay of national wealth. C) silver and gold were the mainstays of national wealth. D) silver and gold are not important for national wealth of a country. E) labor forces were the mainstay of national wealth.
Which of the following strategies that a union might pursue would result in the lowest wage rate for its members?
a. Maximizing the total wage bill b. Maximizing employment of its members c. Restricting union membership severely d. Maximizing the total economic rent obtained by its members