Which of the following is a FALSE statement concerning purchasing power parity?
A) Purchasing power parity states that dollars will tend to exchange for pounds at a rate that maintains a constant purchasing power of a given quantity of a currency.
B) Over the long term, a Big Mac in New York will tend to cost the same as a Big Mac in London.
C) There should not be significant deviations in the long-run value of purchasing power parity.
D) Over the long run, purchasing power parity exerts influence over exchange rates.
E) An overvalued dollar buys more in Britain than it does in the United States.
C
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Luxury brands like designer sun glasses are goods that may exhibit snob effects. Suppose this is true, and the price for a particular brand increases. What happens to the component changes in the quantity demanded?
A. Pure price effect is positive, snob effect is negative. B. Pure price effect and snob effect are positive. C. Pure price effect is negative, snob effect is positive. D. Pure price effect and snob effect are negative.
The distribution of wealth is skewed because more families are below the average level of wealth than are above
Indicate whether the statement is true or false