If the U.S. price level rises relative to the Japanese price level, purchasing power parity predicts a long run increase in the value of the dollar relative to the yen.
Answer the following statement true (T) or false (F)
False
If a basket of U.S. goods costs more than an equivalent basket in Japan because of an increase in U.S. prices, the dollar must fall in value in order to restore purchasing power parity.
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As shown by the IS-LM model, there are two reasons that the Fed can lose control of the economy. One of these reasons is
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Which of the following would be a protective function of government?
a. legal enforcement of contracts and rules against fraud b. undertaking income redistribution c. providing national parks d. providing a stable monetary system
In the long run, monopolistically competitive firms have:
A. excess capacity. B. positive profits. C. minimal average costs. D. homogeneous production.
Joey's Lawncutting Service rents office space from Joey's dad for $300 per month. A similar office space in the same building rents for $545 per month. What is the economic profit earned by Joey's dad?
A) Profit of $245 B) Profit of $100 C) Loss of $100 D) Loss of $245