A. purchasing power parity theory
B. asset markets theory
C. monetary theory
D. balance of payments theory
Correct Answer: purchasing power parity theory ✔
Last Updated: June 11, 2019
Related MCQs
- Assume that a Big Mac hamburger cost $3 in the United States 2 pesos in Mexico The implied purchasing power parity exchange rate between the peso and the dollar is ?
- Due to Japan’s high saving rate, suppose that the Japanese invest abroad. This investment may result in a/an _______ of the Japanese yen and therefore a for Japan?
- Assume identical interest rates on comparable securities in the United States and foreign countries. Suppose investors anticipate that in the future the U.S dollar will depreciate against foreign currencies. investment funds would tend to ?
- Starting from a position where the nation’s money demand equals the money supply and its balance of payments is in equilibrium its balance of payments would move into a surplus position if there occurred in the nation a (an) ?
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- For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from ?
- If Japan runs current account deficit and exchange rates are floating?
- Suppose Canada and Switzerland were the only two countries in the world There exists an excess supply of Swiss francs on the foreign exchange market This suggests that ?
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- Suppose that rising U.S income leads to higher sales and profits in the United States This would likely result in ?
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- Under a system of floating exchange rates relatively high productivity and low inflation rates in the United States results in a (an) ?
- Under a system of floating exchange rates relatively low productivity and high inflation rates in the United States results in a (an) ?
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- If a Big Mac hamburger sells for the same dollar value in New York as in London then ?