The law of one price does not hold closely for most products that are traded internationally, including nearly all manufactured products.
Answer the following statement true (T) or false (F)
True
You might also like to view...
The appropriate monetary policy in the event of a recessionary gap would be to
A) raise the required reserve ratio. B) increase the difference between the federal funds rate and the required reserve ratio. C) engage in an open market purchase of U.S. government securities. D) increase the difference between the discount rate and the federal funds rate.
Making "how much" decisions involves
A) calculating the total costs of the activity and determining if you can afford to incur that expenditure. B) calculating the total benefits of the activity and determining if you are satisfied with that amount. C) determining the additional benefits and the additional costs of that activity. D) calculating the average benefit and the average cost of an activity to determine if it is worthwhile undertaking that activity.
According to the Monetarist view, the impact of expansionary monetary policy will be:
a. the same in the long run as in the short run. b. the same regardless of whether the effects of the policy are anticipated or unanticipated. c. a higher price level (inflation). d. a decrease in short-run prices and an increase in long-run prices.
Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result, the total revenue received by peanut farmers changes from $16 to $14 billion. Thus:
A. the demand for peanuts is elastic. B. the demand for peanuts is inelastic. C. the demand curve for peanuts has shifted to the right. D. no inference can be made as to the elasticity of demand for peanuts.