One reason why purchasing power parity may not work perfectly has to do with barriers to trade such as tariffs and quotas on imports
a. True
b. False
A
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The utility from a specific product is
A. determined by a consumer's income. B. constant as one consumes more units of it. C. determined by the price of the product. D. a measure of one's preference or taste for it.
The money demand curve has a negative slope because
A) lower interest rates cause households and firms to switch from financial assets to money. B) lower interest rates cause households and firms to switch from money to financial assets. C) lower interest rates cause households and firms to switch from money to bonds. D) lower interest rates cause households and firms to switch from money to stocks.
The rule for the optimal use of any input says that
A. when MRP is less than price, it pays to expand resource use. B. when MRP is greater than price, it pays to expand resource use. C. when MRP equals price, resource use should be cut back. D. resources should be used only if MRP exceeds price.
The movement of the budget line from BB to bb in the figure suggests that income has:
A. increased and the price of X has decreased.
B. fallen and the price of Y has increased.
C. fallen and the price of Y has decreased.
D. decreased, but there have been no price changes.