Relative purchasing power parity is:
a. More accurate the shorter the time period.
b. Worse than absolute purchasing power parity at predicting changes in exchange rates.
c. Highly inaccurate because of the conflict between monetary policy and fiscal policy.
d. More accurate the longer the period of time.
e. All the above.
.D
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Water is cheap and diamonds are expensive because water has a ________, and diamonds have a ________
A) low total utility; high total utility B) low marginal utility; high marginal utility C) high marginal utility; low marginal utility D) low marginal utility and a low total utility; high marginal utility and a high total utility
If country A exports good X to country B and country B exports good Y to country A, it is most likely that
A) A has an absolute advantage in the production of good X. B) B has a comparative advantage in the production of good Y. C) the opportunity cost of domestic production of good Y for country A is lowered with trade. D) B is producing less of good Y than in the no-trade case.