Purchasing power parity is the theory that, in the long run, ...

[jerry coleman]

Purchasing power parity is the theory that, in the long run, exchange rates move to equalize
 
  A) the relative purchasing power of currencies across countries.
  B) nominal interest rates across countries.
  C) real GDP across countries.
  D) corporate profits across countries.

Question 2

Refer to Figure 4-3. At the price P2, consumers are willing to buy the Q2 pounds of granola. Is this an economically efficient quantity?
 
  A) Yes, because the price P2 shows what consumers are willing to pay for the product.
  B) No, the marginal benefit of the last unit (Q2 ) exceeds the marginal cost of that last unit.
  C) Yes, otherwise consumers would not buy Q2 units.
  D) No, the marginal cost of the last unit (Q2 ) exceeds the marginal benefit of the last unit.

[jamesnevil303]

Answer to Question 1

A

Answer to Question 2

B