Purchasing power parity theory is a better guide to short-run movements in exchange rates than to long-run movements in exchange rates.

Which of the following will lead to an efficient private solution if negative externalities are present in a market?

A) The party having the legal right is taxed. B) The party creating the externality has the legal property right. C) The party suffering from the externality has the legal property right. D) The parties involved negotiate with each other and reach an agreement.

The Herfindahl-Hirschman Index will indicate that a contestable market is ________

A) a sequential market B) competitive C) uncompetitive D) a prisoners' dilemma