The theory that changes in the exchange rate reflect only changes in the price levels of two countries is called
a. the floating exchange rate theory
b. the fixed exchange rate theory
c. the flexible exchange rate theory
d. purchasing power parity
e. the managed exchange rate theory
D
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Which of the following statements is true about a competitive market? A competitive market
A) has a handful of sellers but always has many buyers. B) must have a physical location. C) includes markets for goods and services but not for inputs. D) has so many buyers and sellers that no one can influence the price. E) has one seller competing to sell his or her product.
A technological advance that increases the productivity of all inputs is best illustrated as: a. a movement along the production possibilities curve. b. a flattening of the production possibilities curve
c. an inward shift of the production possibilities curve. d. an outward shift of the production possibilities curve.