IF when cost $4 per bushel in the United States and 2 pounds per bushel in Great Britain then in the presence of purchasing power parity the exchange rate should be ?

Related Mcqs:

Relatively high real interest rates in the United States tend to ?

A. decrease the foreign demand for dollars causing the dollar to depreciate B. decrease the foreign demand for dollars causing the dollar to appreciate C. increase the foreign demand for dollars causing the dollar to depreciate D. increase the foreign demand for dollars causing the dollar to appreciate...

The asset market approach views exchange rates as being determined mainly by ?

A. the use of import tariffs and quotas by governments B. the current account balance of each country C. the relative growth rate of national output between countries D. efforts of investors to balance their portfolios among financial assets denominated in different currencies...

According to the asset market approach increased investor confidence in the Mexican economy would cause the peso to ?

A. appreciate because of an increase supply of peso denominated assets B. depreciate because of an increased supply of peso denominated assets C. appreciated because of an increased demand for peso denominated assets D. depreciated because of an increased demand for peso denominated assets...

Relatively low real interest rates in the United States tend to ?

A. decrease the foreign demand for dollars causing the dollar to depreciate B. decrease the foreign demand for dollars causing the dollar to appreciate C. increase the foreign demand for dollars causing the dollar to depreciate D. decrease the foreign demand for dollars causing the dollar to appreciate...

Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?

A. appreciate by 8 percent against the yen B. depreciate by 8 percent against the yen C. remain at its existing exchange rate None of the above...