The predictive accuracy of relative purchasing power parity improves if:
a. Both countries have highly mobile capital markets.
b. Both countries have central bank controls in place so that exchange rates change in an orderly manner.
c. Both countries under consideration have very high inflation rates.
d. Both countries under consideration have high growth rates.
e. Both countries are either developed or undeveloped (i.e., one is not developed and the other undeveloped).
.C
Economics
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Over time, a country's real GDP per capita typically
A) shrinks B) grows. C) increases and decreases randomly. D) remains stable.
Economics
A shadow price is:
(a) the price in the previous period. (b) the price in the next period. (c) the social value of a good or service. (d) the market value of a good or service. (e) none of the above.
Economics