The law of one price (LOOP) indicates that:
a. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country.
b. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country.
c. The quantity produced of a good in one country should be equal to the exchange-rate-adjusted quantity produced of the same product in another country.
d. None of the above.
e. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits.
.B
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Tax policy conducted for the purpose of achieving full employment, price stability, or economic growth is an example of
A) discretionary fiscal policy. B) interest-rate policy. C) monetary policy. D) exchange-rate policy.
Which of the following schools of thought are policy interventionists favoring activist aggregate demand management to stabilize output and employment?
a. Keynesians b. Monetarism c. The new classical economics d. The classical economics e. None of the above