In order for the condition E$/HK$=Pus/PHKto hold, what assumptions does the principle of purchasing power parity make
A: No transportation costs and restrictions on trade; commodity baskets that are a reliable indication of price level.
B: Markets are perfectly competitive, i.e., P =MC.
C: The factors of production are identical between countries.
D: A and B.
A: No transportation costs and restrictions on trade; commodity baskets that are a reliable indication of price level.
B: Markets are perfectly competitive, i.e., P =MC.
C: The factors of production are identical between countries.
D: A and B.
举一反三
- Which<br/>of these states that the difference in interest rates between two<br/>countries is equal to the percentage difference between the forward<br/>exchange rate and the spot exchange rate?() A: Arbitrage<br/>equilibrium B: Relative<br/>purchasing power parity C: Absolute<br/>purchasing power parity D: Interest<br/>rate parity E: Cross-rate<br/>parity
- _______ states that differential rates of inflation between two countries tend to be offset over time by an equal but opposite change in the spot exchange rate. A: The Fisher Effect B: The International Fisher Effect C: Absolute Purchasing Power Parity D: Relative Purchasing Power Parity
- The disagreement over trade restrictions could seriously ?______ relations between the two countries.
- The<br/>key difference between a competitive firm and a monopoly firm is the<br/>ability to select ( ) A: the level of competition in<br/>the market. B: the level of production. C: inputs in the production<br/>process. D: the price of its output.
- Which of the following characteristics is shared by both monopolistically competitive markets and perfectly competitive markets?