A perfectly elastic long-run supply curve indicates
A) a decreasing-cost industry.
B) a constant-cost industry.
C) an increasing-cost industry.
D) that some input prices change as firms enter and exit the industry.
B
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Suppose that the price of a Big Mac is a good approximation of the price level in the country. A Big Mac costs £2 in London and $3 in New York
a) If purchasing power parity holds, what is the exchange rate between the U.S. dollar and the British pound? b) If the current exchange rate is $1.6 per pound, what is the dollar price of a Big Mac in London? What do you predict will happen to the exchange rate? Explain. c) The exchange rate between the U.S. dollar and the Russian ruble is 30 rubles per dollar. If purchasing power parity holds, what is the price of a Big Mac in Moscow?
The Federal Reserve System has 12:
A. regional banks. B. members on its Board of Governors. C. member banks. D. basic functions.