In an open economy, the law of one price implies that A) the ...

[Haya94]

In an open economy, the law of one price implies that
 
  A) the domestic economy may have a comparative advantage in only half the goods it produces.
  B) perfect competition holds in all domestic markets.
  C) purchasing power parity should hold.
  D) the nominal exchange rate should equal one.

Question 2

An example of an increase in b, the efficiency of human capital accumulation, is
 
  A) more mandatory school years.
  B) better teachers.
  C) better school material.
  D) better total factor productivity.

[asware1]

Answer to Question 1

C

Answer to Question 2

C

[Haya94]

Gracias!

[gcook]

Excellent