If the real exchange rate between the U.S. and Argentina is 1, then
a. purchasing-power parity holds, and 1 U.S. dollar buys 1 Argentinean bolivar.
b. purchasing-power parity holds, and the amount of dollars needed to buy goods in the U.S. is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina.
c. purchasing-power parity does not hold, but 1 U.S. dollar buys 1 Argentinean bolivar.
d. purchasing-power parity does not hold, but the amount of dollars needed to buy goods in the U.S. is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina.
b
You might also like to view...
Which of the following statements is true of the scientific method?
A) The scientific method may not reveal a "true" model of the world. B) The scientific method does not require the models to be tested with data. C) The scientific method used by economists and scientists is independent of empiricism. D) The scientific method can help develop accurate models even when data are unavailable.
The rise in unemployment in a country resulted in many unemployed people turning to criminal activity such as drug dealing, violent theft, and robbery as an alternative means to make money. It also led to growing political unrest. Therefore, unemployment in this country resulted in _____
a. a loss of lifetime earnings b. a loss of human capital c. the deterioration of health d. a loss of social cohesion