There is more empirical evidence in the literature to suggest that
A. the absolute version of purchasing power parity holds in the long run.
B. the absolute version of purchasing power parity holds in the short run.
C. the relative version of purchasing power parity holds in the long run.
D. the relative version of purchasing power parity holds in the short run.
Answer: C
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Assuming everyone wants to advance their interests in an effective way is an assumption of
A) capitalism. B) economic theory. C) government. D) selfishness.
In the above figure, the economy is at point A. Then the price level falls to 90 while the money wage rate does not change. Firms will be willing to supply output equal to
A) less than $16.0 trillion. B) $16.0 trillion. C) more than $16.0 trillion. D) Without more information, it is impossible to determine which of the above answers is correct.