According to purchasing power parity, which of the following is FALSE about an overvalued dollar compared to the Japanese yen?
A) U.S. merchants would be motivated to import more Japanese goods.
B) Japanese merchants would tend to export more to the United States.
C) Prices in the United States would tend to fall.
D) Over the long term, the exchange rate would fall.
D
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In the quantity equation, V represents the:
A. total number of transactions during some period of time. B. price of a typical transaction. C. rate at which each unit of money circulates in the economy. D. quantity of money.
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 30,000 units
A) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently high. B) producers should raise the price to $3 in order to sell the quantity demanded of 30,000. C) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high. D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low.