If purchasing power parity holds, then if the price of a basket of goods in the U.S. rose from $1,500 to $2,000 and the price of the same basket in Mexico rose from 12,000 pesos to 18,000 pesos
a. inflation was higher in the U.S. than Mexico so the U.S. dollar would appreciate.
b. inflation was higher in the U.S. than Mexico so the U.S.dollar would depreciate.
c. inflation was lower in the U.S. than Mexico so the U.S. dollar would appreciate.
d. inflation was lower in the U.S. than Mexico so the U.S dollar would depreciate.
c
Economics
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The principle of diminishing marginal utility implies that the
A) marginal utility of a product is negative. B) total utility from a product is also diminishing as more units are consumed. C) rate of change of total utility is diminishing as more units are consumed. D) rate of change of marginal utility is very low as more units are consumed.
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What is the value of the deposit multiplier?
A) 0.1 B) 0.2 C) 1 D) 5
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