Relative PPP indicates that
A) the exchange rate between any two currencies is equal to the ratio of their price indexes.
B) the same good sells for the same price internationally.
C) the percentage change in the exchange rate is equal to the inflation differential between the domestic and foreign country.
D) relative prices determine exchange rates.
C
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Which of the following changes should make activist policy makers more confident in their capacity to make good policy recommendations?
A) structural change in the economy B) changes in multipliers C) a longer estimated lag for monetary policy D) none of the above
Monetary policy and fiscal policy influence
a. output and prices in the short run and the long run. b. output and prices in the short run only. c. output in the short run and the long run. d. output in the short run only.