One reason a computer manufacturer may produce its own microchips ...

[CQXA]

One reason a computer manufacturer may produce its own microchips rather than buy them is that it can maintain control over production quality.
 a. True
  b. False

Question 2

Suppose a basket of goods costs 400 in the United States and 200 in Britain. If the exchange rate is 1/pound, what will happen in the foreign exchange market, according to the purchasing power parity theory?
 a. The market will go further out of equilibrium because of increased activity.
  b. An increase in demand for pounds will lead to an increase in the price of pounds.
  c. An increase in demand for dollars will lead to an increase in the price of dollars.
  d. An increase in demand for dollars will lead to a decrease in the price of dollars.
  e. An increase in demand for pounds will lead to a decrease in the price of pounds.

[kbennett34]

Answer to Question 1

A

Answer to Question 2

B