Suppose purchasing power parity holds. If in 1997 the price level in the United States is 100, the price level in Japan is 10,000, and the nominal exchange rate is 100 yen per dollar, while in 1998 the price level in Japan rises to 10,500 and the
nominal exchange rate rises to 105, then the price level in the United States in 1998 must be A) 95.
B) 100.
C) 105.
D) 110.25.
B
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What will be an ideal response?
A contract may remain incomplete because the expected benefits of greater completeness do not cover the costs of drafting it
Indicate whether the statement is true or false
Other things remaining the same, a decrease in the real return on bonds causes the velocity of money to:
a. Rise. b. Fall. c. Not change.
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