Suppose that a currency's value is found to be overvalued by using purchasing power parity. Then
A) the currency will appreciate in the future but we don't know when.
B) we know when and how much the currency will depreciate.
C) the interest rate in the country will change in order to restore purchasing power parity.
D) we know when and how much the currency will appreciate.
E) the currency will depreciate in the future but we don't know when.
E
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Negative autocorrelation in the change of a variable implies that
A) the variable contains only negative values. B) the series is not stable. C) an increase in the variable in one period is, on average, associated with a decrease in the next. D) the data is negatively trended.
Using taxes to finance a war, rather than deficits,
A) leads to a greater future capital stock. B) is generally not proposed by economists. C) shares less of the burden of the war with future generations. D) all of the above E) none of the above