According to the theory of purchasing-power parity, the nominal exchange rate between two countries must reflect the differing
a. price levels in those countries.
b. resource endowments in those countries.
c. income levels in those countries.
d. standards of living between those countries.
a
You might also like to view...
Which of the following will be most likely to cause the production possibilities curve for a country to shift inward?
a. an increase in the labor force b. an increase in unemployment c. development of an improved technological method of production d. a decrease in the stock of physical capital
Figure 10-3
?
In Figure 10-3, we would expect the aggregate supply curve in graph (b) to eventually
A. shift to the right, eliminating the recessionary gap. B. shift to the left, eliminating the inflationary gap. C. become steeper in the upper portion, eliminating the inflationary gap. D. become flatter in the upper portion, eliminating the recessionary gap.