This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Is PPP a theory of exchange rate determination? Explain why or why not? What will be an ideal ... (Read 46 times)

urbanoutfitters

  • Hero Member
  • *****
  • Posts: 530
on: Jun 30, 2018
Is PPP a theory of exchange rate determination? Explain why or why not?
 
  What will be an ideal response?

Question 2

International Economists cannot discuss the effects of international trade or recommend changes in government policies toward trade with any confidence unless they know
 
  A) their theory is the best available.
  B) their theory is internally consistent.
  C) their theory passes the reasonable person legal criteria.
  D) their theory is good enough to explain the international trade that is actually observed.
  E) their theory accounts for China's unique position in international trade.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

bassamabas

  • Sr. Member
  • ****
  • Posts: 294
Reply #1 on: Jun 30, 2018
Answer to Question 1

PPP is not a theory of exchange rate determination. It describes an equilibrium relationship between two endogenous variablesprices and exchange rates. As such, the PPP relationship should be viewed as a short-cut rather than a substitute for a complete determination of prices and exchange rates. Its main usefulness is in providing a guide to the general trend of exchange rates rather than day-to-day fluctuations.

Answer to Question 2

D


urbanoutfitters

  • Member
  • Posts: 530
Reply 2 on: Jun 30, 2018
Wow, this really help

dawsa925

  • Member
  • Posts: 326
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

More than nineteen million Americans carry the factor V gene that causes blood clots, pulmonary embolism, and heart disease.

Did you know?

Computer programs are available that crosscheck a new drug's possible trade name with all other trade names currently available. These programs detect dangerous similarities between names and alert the manufacturer of the drug.

Did you know?

More than 20 million Americans cite use of marijuana within the past 30 days, according to the National Survey on Drug Use and Health (NSDUH). More than 8 million admit to using it almost every day.

Effects of growth rate on development. Effects of growth rate on development.
Feedforward control of breathing rate in an animal trained for athletic exercise. Feedforward control of breathing rate in an animal trained for athletic exercise.
THE RATE OF PHOTOSYNTHESIS THE RATE OF PHOTOSYNTHESIS
Contact theory indicates that prejudice decreases and relations improve when individuals of ... Contact theory indicates that prejudice decreases and relations improve when individuals of ...
Income per Capita versus Total Fertility Rate Income per Capita versus Total Fertility Rate
Effect of Increasing the Investment Rate on the Steady State Effect of Increasing the Investment Rate on the Steady State
Video: Pneumonia Animation

For a complete list of videos, visit our video library