According to purchasing-power parity, if two countries have the same price level because they have the same prices for all goods and services, then which of the following would equal 1?
a. the real exchange rate, but not the nominal exchange rate
b. the nominal exchange rate, but not the real exchange rate
c. the real exchange rate and the nominal exchange rate
d. neither the real exchange rate nor the nominal exchange rate
c
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Electricity has a negative production externality because _____
A. its marginal benefit decreases as more of it is consumed B. the marginal private cost of producing it increases as more of it is produced C. the marginal social cost of producing it exceeds the marginal private cost of producing it D. a marginal external cost lowers the marginal benefit from consuming it
In barometric price leadership, one firm announces a change in price
a. and the other firms follow b. but the other firms refuse to follow c. that it hopes will be accepted by others d. which is merely a test of the market e. none of the above.