Purchasing power parity suggests that
a. Given fixed prices, interest rates adjust so that a good costs the same across two countries
b. Given fixed exchange rates, prices adjust such that a good costs the same across two countries
c. All of the above
d. None of the above
c
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John's reservation wage is $10 per hour. This means that
A) John will not supply labor in the market until he receives a wage of at least $10 per hour. B) John will supply labor in the market at a wage of $10 and lower. C) John will work 10 hours per day. D) John will decrease the hours he works when his wage rate exceeds $10 per hour.
International trade based on external scale economies in both countries is likely to be carried out by
A) a relatively large number of price competing firms. B) a relatively small number of price competing firms. C) a relatively small number of imperfect competitors. D) monopolists in each country. E) a large number of oligopolists in each country.