In the figure above, suppose a subsidy is provided to private colleges. What amount of subsidy will ensure the efficient number of students?

If purchasing power parity holds, the exchange rate (e) can be expressed as a function of the domestic price (P) and the foreign price (P*) as

A) e = P - P*. B) e = P* - P. C) e = P* + P. D) e = P/P*.

In a perfectly competitive market, the market demand curve is horizontal

a. True b. False