If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

Relative purchasing power parity is:

a. More accurate the shorter the time period. b. Worse than absolute purchasing power parity at predicting changes in exchange rates. c. Highly inaccurate because of the conflict between monetary policy and fiscal policy. d. More accurate the longer the period of time. e. All the above.

Explain why the interest rate is the opportunity cost of holding currency. What is the benefit of holding currency?