Exam 18: Open Economy Macroeconomics Basic Concepts: A First Theory of Exchange-Rate Determination Purchasing-Power Parity

If purchasing-power parity holds,when a country's central bank decreases the money supply,its

Suppose a Starbucks tall latte costs $4.00 in the United States and 3.20 euros in the Euro area.Also,suppose a McDonald's Big Mac costs $4.40 in the United States and 5.50 euros in Euro area.If the nominal exchange rate is .80 euros per dollar,the prices of which goods have prices that are consistent with purchasing-power parity?

According to purchasing-power parity,which of the following necessarily equals the ratio of the foreign price level divided by the domestic price level?

According to purchasing-power parity,when a country's central bank decreases the money supply,a unit of money

According to purchasing-power parity,if a basket of goods costs $100 in the U.S.and the same basket costs 800 pesos in Argentina,then what is the nominal exchange rate?

If purchasing-power parity holds,when a country's central bank increases the money supply,a unit of money

If a dollar buys more corn in the U.S.than in Mexico,then

During a hyperinflation the real domestic value of a country's currency

According to purchasing-power parity,if it took 55 Indian rupees to buy a dollar today,but it took 58 to buy it a year ago,then the dollar has

A basket of goods costs $800 in the U.S.In Belgium the basket of goods costs 640 euros and the exchange rate is .80 euros per U.S.dollar.In Japan the basket of goods costs 90,000 yen and the exchange rate is 90 yen per dollar.Which country has purchasing-power parity with the U.S.?

If purchasing power parity holds,then if the price of a basket of goods in the U.S.rose from $1,500 to $2,000 and the price of the same basket in Mexico rose from 12,000 pesos to 18,000 pesos

If over the next few years inflation is higher in Mexico than in the U.S. ,then according to purchasing-power parity which of the following should rise?

If the exchange rate is 8 Moroccan dirhams per U.S.dollars,a crate of oranges costs 400 dirhams in the Moroccan capital of Rabat,and a similar crate of oranges in Miami sells for $55 dollars,then

If purchasing-power parity holds but then U.S.prices rise,which of the following move the exchange rate back towards purchasing-power parity?

On behalf of your firm,you make frequent trips to Tokyo.You notice that you always have to pay more dollars to get your hair cut than you pay in the U.S.This observation is

If a lobster in Maine costs $10 and that the same type of lobster in Massachusetts costs $30,then people could make a profit by

A pair of running shoes costs $70 in the U.S.If the price of the same shoes is 4500 rupees in India and the exchange rate is 60 rupees per dollar,than the real exchange rate is

According to purchasing-power parity,inflation in the U.S.causes the dollar to

Purchasing-power parity theory does not hold at all times because

If purchasing-power parity holds,the price level in the U.S.is 250,and the price level in Japan is 260,which of the following is true?