The theory of purchasing power parity

Assignment Help Microeconomics

Reference no: EM13696644

The theory of purchasing power parity:

a. assumes that inflation rates are roughly the same in most countries

b. was valid only under the gold standard

c. extends the law of one price to a group of goods

d. assumes that most changes in nominal exchange rates are the result of changes in real exchange rates

Reference no: EM13696644

Questions Cloud

Regulators manage the moral hazard from various protections : Describe ways in which bank regulators manage the moral hazard from the various protections given to the banking industry. Suppose you are graduating and your rich Uncle makes you an offer. You can accept $5,000 from him today or wait 3 years and rec..

Created from fred’s initial deposit : Suppose Fred deposits $8,000 in cash into his checking account at the Bank of Bonzo. The Bank of Bonzo has no excess reserves and is subject to a 5 percent required reserve ratio. What is the maximum amount of deposits that can be created from Fred’s..

Split your crop acres between soybeans and corn : Crop insurance price guarantees were set in the spring, prior to planting, at $11.36/bushel for soybeans, and $4.62/bushel for corn. Decline in price losses were determined in November to be based on $9.65/bushel for soybeans and $3.49/bushel for cor..

Consumer tax rates-real gross domestic product : In the long-run, if government increases consumer tax rates, real gross domestic product (GDP), unemployment and the price level will change in which of the following ways?

The theory of purchasing power parity : The theory of purchasing power parity:

Domestic and foreign financial investments : When deciding between domestic and foreign financial investments, investors typically consider:

Likely to lead to an increase in the value of the dollar : Which of the following is most likely to lead to an increase in the value of the dollar?

Accounting used by the international monetary fund : The international unit of accounting used by the International Monetary Fund (IMF) is called, A multinational agency that specializes solely in making loans to promote long-term development and growth in developing countries is the

Moral hazard inhibits the financing of global growth : Moral hazard inhibits the financing of global growth because, Which of the following is true about the World Bank? The multinational organization that aims to promote world economic growth by fostering financial stability is the

User Account

All Pages