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 ?
A. 0.67 pesos = $1
B. 0.8 pesos = $1
C. 1.25 pesos = $1
D. 1.67 pesos = $1
A. appreciation; trade surplus
B. appreciation; trade deficit
C. depreciation; trade surplus
D. depreciation; trade deficit
A. flow from the United States to foreign countries
B. flow from foreign countries to the United States
C. remain totally in foreign countries
D. remain totally in the United States
A. decrease in the money supply
B. increase in the money supply
C. decrease in the money demand
D. None of the above
A. faster economic growth than Japan
B. higher future interest rates than Japan
C. more rapid money supply growth than japan
D. higher inflation rates than japan
Given a system of floating exchange rates falling income in the United States would trigger a (an) ?
A. increase in the demand for imports and an increase in the demand for foreign currency
B. increase in the demand for imports and a decrease in the demand for foreign currency
C. decrease in the demand for imports and an increase in the demand for foreign currency
D. decrease in the demand for imports and a decrease in the demand for foreign currency