Assume that the dollar price of a U.S. basket is $2 and the Mexican price for a U.S. basket is 40 pesos. On the other hand, the Mexican price for the Mexican basket is 100 pesos
Given this information, the dollar price for the Mexican basket will be:
A) $8. B) $12. C) $10. D) $5.
D
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A monopolistically competitive firm that is earning profits will, in the long run, experience all of the following except
A) demand for the firm's product becomes more elastic. B) a decrease in demand for its product. C) new rivals entering the market. D) a decrease in the number of rival products.
One of the primary objections to the new classical model is that ________
A) firms could easily get information about price movements and so would not be fooled for very long B) price is negatively related to quantity demanded, but positively related to quantity supplied C) business cycles are relatively brief in duration D) it failed to incorporate rational expectations into its presentation