If the rate of inflation in Country A is higher than in Country B, then ________

A) in nominal terms, country A's currency should depreciate
B) in nominal terms, country B's currency should depreciate
C) the law of one price will not hold
D) purchasing power parity does not apply

A

Economics

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Refer to Scenario 14.3. What is the marginal profit from hiring the third unit of labor?

A) 30 B) 65 C) 85 D) 225 E) none of the above

Economics

In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburgers. A hot dog cost $3 in 2006 and $5.40 in 2007 . A hamburger cost $5 in 2006 and $6 in 2007 . Which of the following statements is correct?

a. When 2006 is chosen as the base year, the consumer price index is 90 in 2007. b. When 2006 is chosen as the base year, the inflation rate is 150 percent in 2007. c. When 2007 is chosen as the base year, the consumer price index is 100 in 2006. d. When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007.

Economics