Purchasing power parity implies:
A. a basket of goods will sell for the same price in all countries as long as there are no trade barriers is a free flow of capital across borders.
B. a basket of goods should sell for the same price in all countries, even if trade barriers exist.
C. as long as all goods and services are traded freely across international boundaries, one unit of domestic currency should buy the same basket of goods anywhere in the world.
D. a basket of goods cannot sell for the same price in different countries due to the different wage rates.
Answer: C
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a. True b. False
Which of the following will NOT cause a rightward shift in the supply curve?
A) an improvement in technology B) a reduction in resource costs C) a reduction in the expected future price D) none of the above