Which of the following does purchasing-power parity imply?
a. The purchasing power of the dollar is the same in the U.S. as in foreign countries.
b. The price of domestic goods relative to foreign goods cannot change.
c. The nominal exchange rate is the ratio of U.S. prices to foreign prices.
d. All of the above are correct.
a
You might also like to view...
Purchasing power parity holds when the exchange rate is equal to the product of the foreign price level and the domestic price level
a. True b. False Indicate whether the statement is true or false
Exhibit 15-7 Lower Walloon National Bank Assets Liabilities Reserves$10,000 Checkable deposits$10,000 In Exhibit 15-7, if the required reserve ratio is 20 percent for all banks, and every bank in the banking system loans out all of its excess reserves. Then a $10,000 deposit from Mr. Brown in checkable deposits could create for the entire banking system:
A. $8,000 worth of new money. B. $2,000 worth of new money. C. $10,000 worth of new money. D. $40,000 worth of new money.