Relative PPP indicates that
A) the exchange rate between any two currencies is equal to the ratio of their price indexes.
B) the same good sells for the same price internationally.
C) the percentage change in the exchange rate is equal to the inflation differential between the domestic and foreign country.
D) relative prices determine exchange rates.
C
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In 2008, federal, state, and local redistribution programs were most close to
a. $20.0 trillion b. $200.0 billion c. $2.0 billion d. $200.0 trillion e. $2.0 trillion
Assume demand is held constant and supply increases. The result is a decrease in the equilibrium price and an increase in the equilibrium quantity of the item bought and sold
a. True b. False Indicate whether the statement is true or false
Picture a linear downward-sloping demand curve. If the price continues to fall, price elasticity will
a. decrease b. increase c. remain unchanged d. approach infinity e. increase or decrease, depending on the character of the good
Suppose that the value of the multiplier has decreased in recent years. Which of the following could have caused this?
A. The costs of inventory storage have risen. B. Changes in the way the unemployment compensation fund is financed have made it less expensive for firms to lay off workers. C. Consumption has become less sensitive to changes in the interest rate. D. There has been an increase in the demand for imported goods.