If purchasing-power parity holds, then the value of the
a. real exchange rate is equal to one.
b. nominal exchange rate is equal to one.
c. real exchange rate is equal to the nominal exchange rate.
d. real exchange rate is equal to the difference in inflation rates between the two countries.
a
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Assume the economy is operating at a real GDP above full-employment real GDP. Keynesian economists would prescribe which of the following policies?
a. Expansionary b. Nonintervention c. Passive monetary policy d. Contractionary
Table 5.2National Income Accounts (dollar figures are in billions)Expenditures for consumer goods and services$2,850Exports$300Government purchases of goods and services$810Social Security taxes$295Net investment$510Indirect business taxes$445Imports$450Gross investment$700Corporate income taxes$190Personal income taxes$875Corporate retained earnings$210Net foreign factor income$0Government transfer payments to households$780Net interest payments to households$20On the basis of Table 5.2, national income is
A. $3,785 billion. B. $4,020 billion. C. $3,595 billion. D. $2,475 billion.