Author Question: A fundamental problem in international economics is how to produce A) a perfect degree of ... (Read 60 times)

itsmyluck · **on:** Jun 30, 2018

A fundamental problem in international economics is how to produce

A) a perfect degree of monetary harmony.
B) an acceptable degree of harmony among the international trade
policies of different countries.
C) a world government that can harmonize trade and monetary policies
D) a counter-cyclical monetary policy so that all countries will not be adversely affected by a financial crisis in one country.
E) a worldwide form of currency.

Question 2

If relative PPP held, then the real exchange rate must be equal to one.

Indicate whether the statement is true or false

Brenm · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

B

Answer to Question 2

FALSE
Explanation: If relative PPP held, then the real exchange rate must be equal to a constant number.