All of the following explain why purchasing power parity does not ...

[NguyenJ]

All of the following explain why purchasing power parity does not completely explain long-run fluctuations in exchange rates except
 
  A) some countries impose barriers to trade.
  B) not all goods and services produced in any country are traded internationally.
  C) most countries have free markets with little, if any, government regulation.
  D) consumer preferences for goods and services differ across countries.

Question 2

Refer to Figure 15-13. In the figure above, if the economy in Year 1 is at point A and is expected in Year 2 to be at point B, then the appropriate monetary policy by the Federal Reserve would be to
 
  A) lower income taxes. B) raise interest rates.
  C) raise income taxes. D) lower interest rates.

[scikid]

Answer to Question 1

C

Answer to Question 2

B

[NguyenJ]

Excellent

[olderstudent]

Gracias!