Absolute purchasing power parity (PPP) holds for a product bundle if
A. the law of one price holds for each of the goods in the bundle.
B. there exists free trade in all the commodities.
C. the law of diminishing returns holds for all the goods in the bundle.
D. the goods are traded with minimum transportation costs.
Answer: A
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Suppose that while vacationing in Switzerland, you won 9,375 Swiss francs, which is the equivalent of $8,000. When you return to the United States, you deposit the $8,000 into your checking account
If the required reserve ratio is 15 percent, this would increase your bank's A) assets by $1,200. B) required reserves by $8,000. C) excess reserves by $8,000. D) liabilities by $8,000.
Which of the following would likely be the most effective possible solution when a scarce resource is subject to the tragedy of the commons?
A) offer subsidies to the users of the commons B) restrict access to the commons through community norms and laws C) persuade people to use less of the scarce resource through an advertising campaign D) force people to move a great distance away from the commons