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

Author Question: Which of the following statements is true about purchasing power parity (PPP)? a. PPP is the normal ... (Read 24 times)

mspears3

  • Hero Member
  • *****
  • Posts: 586
on: Jun 30, 2018
Which of the following statements is true about purchasing power parity (PPP)?
 a. PPP is the normal state between two nations because international markets are perfectly competitive.
  b. PPP is the normal state between two nations because of government regulations and central bank intervention.
  c. PPP is the normal state between two nations because interest rates, the spot exchange rate, and the forward exchange rate all adjust to create this condition.
  d. PPP is the normal state between two nations because arbitrageurs take advantage of any imbalances.
  e. PPP is rarely the case for most nations in the short-run, but exchange rates tend to move in the direction of PPP in the long run.

Question 2

Which of the following is a shortcoming of the nominal, effective exchange rate?
 a. The nominal, effective exchange rate does not take price differences into account.
  b. The nominal, effective exchange rate as a measure is too narrow because it only shows changes in the value of one currency against one other currency.
  c. The nominal, effective exchange rate is not easy to calculate because there are no data to determine the currency weights.
  d. The nominal, effective exchange is not a meaningful measure because the differences in inflation are over-emphasized.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

srodz

  • Sr. Member
  • ****
  • Posts: 333
Reply #1 on: Jun 30, 2018
Answer to Question 1

.E

Answer to Question 2

.A


mspears3

  • Member
  • Posts: 586
Reply 2 on: Jun 30, 2018
Excellent

carlsona147

  • Member
  • Posts: 341
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Did you know?

Medication errors are three times higher among children and infants than with adults.

Did you know?

To prove that stomach ulcers were caused by bacteria and not by stress, a researcher consumed an entire laboratory beaker full of bacterial culture. After this, he did indeed develop stomach ulcers, and won the Nobel Prize for his discovery.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Did you know?

The first war in which wide-scale use of anesthetics occurred was the Civil War, and 80% of all wounds were in the extremities.

Changes in bronchioles during an asthma attack: (A) normal bronchiole and (B) in asthma attack. Changes in bronchioles during an asthma attack: (A) normal bronchiole and (B) in asthma attack.
An ECG strip showing a normal sinus rhythm with the P wave, QRS complex, and T wave identified. An ECG strip showing a normal sinus rhythm with the P wave, QRS complex, and T wave identified.
Power Versus Tripod Grip Power Versus Tripod Grip
A normal chest X-ray. A normal chest X-ray.
Hematocrits, left to right: normal, anemia, polycythemia. Hematocrits, left to right: normal, anemia, polycythemia.
Normal Liver Normal Liver
Video: baroreceptors

For a complete list of videos, visit our video library