Author Question: If a kilogram of coal costs 1.5 in Germany and 1 in the United States, the law of one price ... (Read 107 times)

TVarnum

  • Hero Member
  • *****
  • Posts: 548
If a kilogram of coal costs 1.5 in Germany and 1 in the United States, the law of one price calculates the expected exchange rate between the euro and the dollar to be ________.
 
  A) 0.67/
  B) 1.5/
  C) 1.67/
  D) 0.12/

Question 2

Which of the following is a reason for the failure of PPP to predict exchange rates accurately?
 
  A) PPP takes transportation costs into consideration while predicting exchange rates.
  B) PPP assumes no barriers to international trade while predicting exchange rates.
  C) PPP considers the role of people's confidence and beliefs about a nation's economy in exchange rate predictions.
  D) PPP does not take into account the effect of the market forces of demand and supply.



kiamars2010

  • Sr. Member
  • ****
  • Posts: 341
Answer to Question 1

B

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Walt Disney helped combat malaria by making an animated film in 1943 called The Winged Scourge. This short film starred the seven dwarfs and taught children that mosquitos transmit malaria, which is a very bad disease. It advocated the killing of mosquitos to stop the disease.

Did you know?

The U.S. Pharmacopeia Medication Errors Reporting Program states that approximately 50% of all medication errors involve insulin.

Did you know?

Intradermal injections are somewhat difficult to correctly administer because the skin layers are so thin that it is easy to accidentally punch through to the deeper subcutaneous layer.

Did you know?

The ratio of hydrogen atoms to oxygen in water (H2O) is 2:1.

Did you know?

Adults are resistant to the bacterium that causes Botulism. These bacteria thrive in honey – therefore, honey should never be given to infants since their immune systems are not yet resistant.

For a complete list of videos, visit our video library