Author Question: IPods are less expensive in Canada than the United States, once the exchange rate is taken into ... (Read 35 times)

ss2343 · **on:** Jun 30, 2018

iPods are less expensive in Canada than the United States, once the exchange rate is taken into account. This is an indication that

A) the nominal exchange rate is equal to one.
B) purchasing power parity does not hold.
C) the law of one price holds.
D) the exchange rate is fixed.

Question 2

A belief that demand shocks are an important source of business cycle fluctuations implies a preference of ________.

A) the new Keynesian model over the traditional Keynesian model
B) the real business cycle model over the traditional Keynesian model
C) the real business cycle model over the new Keynesian model
D) the new Keynesian model over the real business cycle model