Author Question: Studies of PPP covering many years will be more likely to yield evidence of PPP than studies based ... (Read 39 times)

daltonest1984 · **on:** Jun 30, 2018

Studies of PPP covering many years will be more likely to yield evidence of PPP than studies based on short-run data.

Indicate whether the statement is true or false

Question 2

After World War II, the United States has pursued a broad policy of

A) strengthening Fortress America protectionism.
B) removing barriers to international trade.
C) isolating Iran and other members of the axis of evil.
D) protecting the U.S. from the economic impact of oil producers.
E) restricting trade of manufactured goods.

Jossy · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

TRUE
Explanation: The longer time frame will allow for more inflation so that the random relative price effects are relatively unimportant and we find exchange rate changes closely related to inflation differentials.

Answer to Question 2

B