A.Relative PPP is not a reasonable approximation to theB.Relative PPP is sometimes a reasonable approximation to the data but usually performsC.Relative PPP is sometimes a reasonab...

A.PPP appears to be of limited use as a short-run explanation of exchange rate movements.B.PPP appears to be of limited use even as a short-run explanation of exchange rate movemen...

A.transport costs and restrictions onB.monopolistic or oligopolistic practices in goodsC.the inflation data reported in different countries are based on different commodityD.A, B, ...

Suppose Russia’s inflation rate is 200% over one year, but the inflation rate in Switzerland is only 2%. According to relative PPP, what should happen over the year to the Swiss f...

You are planning a 30-day vacation on Langkawi Island, Malaysia, one year from now. The present charge for a luxury suite plus meals in Malaysian ringgit (RM) is RM1,050/day. The M...

A.depreciation always has a favorable effect on the currentB.import dependency reinforces the effects of depreciation on the current account.C.high elasticity of exports is suffici...

If the economy starts in long-run equilibrium, a permanent fiscal expansion will causeA.an increase in exchange rate,B.a decrease in exchange rate,C.an increase in output,D.a decre...

Which of the following are true in terms of the current account balance?A.Monetary expansion increases the current accountB.Monetary expansion decreases the current accountC.Fiscal...

In the short run, with prices fixed, how would an increase in government spending affect the DD-AA schedule?A.It will increase output and appreciate theB.It will increase output an...

A.The AA schedule has a positive slope because an increase in output leads to a depreciation of theB.The AA schedule has a negative slope because an increase in output leads to a d...

Imagine that the economy is at a point on the DD-AA schedule that is above both AA and DD, where both the output and asset markets are out of equilibrium. Which first action is tru...

A.shifts the AA curve to the right, increases output, and depreciates the currency.B.shifts the AA curve to the left, increases output, and depreciates theC.shifts the AA curve to ...