Author Question: The purchasing power parity predicts that if US price level falls relative to the Mexico price ... (Read 79 times)

Pineappleeh · **on:** Jul 1, 2018

The purchasing power parity predicts that if US price level falls relative to the Mexico price level, then
a. Dollar value will rise relative to the peso
b. Dollar value will fall relative to the peso
c. There is no effect on either currency
d. PPP predicts price level will normalize in the long-run

Question 2

The existence of diseconomies of scale (size) for the firm is hypothesized to result from:
a. transportation costs
b. imperfections in the labor market
c. imperfections in the capital markets
d. problems of coordination and control encountered by management
e. All of the above