The degree that PPP may hold in the short- or in the long-run is ...

[mynx]

The degree that PPP may hold in the short- or in the long-run is very much related to the choice of an exchange rate regime.
 
  Indicate whether the statement is true or false

Question 2

If a country produces good Y (measured on the vertical axis) and good X (measured on the horizontal axis), then the absolute value of the slope of its production possibility frontier is equal to
 
  A) the opportunity cost of good X.
  B) the price of good X divided by the price of good Y.
  C) the price of good Y divided by the price of good X.
  D) the opportunity cost of good Y.
  E) the cost of capital (assuming that good Y is capital intensive) divided by the cost of labor.

[nickk12214]

Answer to Question 1

TRUE

Answer to Question 2

A