Chapter 6,8,9
1. If an identical product can be sold in two different markets, and no restrictions exist on the sale or transportation costs, the product's price should be the same in both markets. This is know as_________
A) relative purchasing power parity.
B) interest rate parity.
C) the law of one price.
D) equilibrium.
2. ________ states that the spot exchange rate is determined by the relative prices of similar baskets of goods.
A) Absolute purchasing power parity
B) Relative purchasing power parity
三角紫叶酢浆草C) Interest rate parity
D) The Fisher Effect
3. The Economist publishes annually the "Big Mac Index" by which they compare the prices of the McDonald's Corporation's Big Mac hamburger around the world. The index estimates the exchange rates for currencies bad on the assumption that the burgers in question are the same across the world and therefore, the price should be the same. If a Big Mac costs $2.54 in the United States and 294 yen in Japan, what is the estimated exchange rate of yen per dollar as hypothesized by the Hamburger index?
A) $0.0086/¥
B) 124¥/$
C) $0.0081/¥
D) 115.75¥/$
4. If the current exchange rate is 113 Japane yen per U.S. dollar, the price of a Big Mac hamburger in the United States is $3.41, and the price of a Big Mac hamburger in Japan is 280 yen, then other things equal, the Big Mac hamburger in Japan is ________.
A) correctly priced 发生火灾时的正确做法是什么
B) under priced
C) over priced
D) not enough information to determine if the price is appropriate or not
5. The price of a Big Mac in the U.S. is $3.41 and the price in Mexico is Peso 29.0. What is the implied PPP of the Peso per dollar?
爱伦坡短篇小说>四川军阀刘湘
A) Peso 8.50/$1
B) Peso 10.8/$1
C) Peso 11.76/$1
D) None of the above
6. The implied PPP rate of exchange of Mexican Pesos per U.S. Dollar is 8.50 according to the Big Mac Index. The current exchange rate is Peso 10.8/$1. Thus, according to PPP and the Law of One Price, at the current exchange rate the peso is ________.
A) overvalued
B) undervalued
C) correctly valued
D) not enough information to answer this question
7. If according to the law of one price the current exchange rate of
dollars per British pound is $1.75/£, then at an exchange rate of $1.85/£, the dollar is ________.
A) overvalued
B) undervalued
C) correctly valued
D) unknown relative valuation
8. True or Fal
The assumptions for relative PPP are more rigid than the assumptions for absolute PPP.
9. One year ago the spot rate of U.S. dollars for Canadian dollars was $1/C$1. Since that time the rate of inflation in the U.S. has been 4% greater than that in Canada. Bad on the theory of Relative PPP, the current spot exchange rate of U.S. dollars for Canadian dollars should be approximately ________.
A) $0.96/C$
B) $1/C$1
C) $1.04/C$1
D) relative PPP provides no guide for this type of question
10. True or Fal
Empirical tests prove that PPP is an accurate predictor of future exchange rates.
11. Two general conclusions can be made from the empirical tests of purchasing power parity (PPP):
A) PPP holds up well over the short run but poorly for the long run and the theory holds better for countries with relatively low rates of inflation. 夕阳的句子
B) PPP holds up well over the short run but poorly for the long run and the theory holds better for countries with relatively high rates of inflation.
C) PPP holds up well over the long run but poorly for the short run and the theory holds better for countries with relatively low rates of inflation.
D) PPP holds up well over the long run but poorly for the short run and the theory holds better for countries with relatively high rates of inflation.
12. If a country's real effective exchange rate index were to be less than 100, this would suggest an ________ currency.
A) overvalued 李坑
B) over compensating 含羞草的花语
C) undervalued
D) under compensating
13. If we t the real effective exchange rate index between Canada and the United States equal to 100 in 1998, and find that the U.S. dollar has rin to a value of 112.6, then from a competitive perspective the U.S. dollar is
A) overvalued.
B) undervalued.
C) very competitive.
家用血糖仪怎么用
D) There is not enough information to answer this question.
14. If we t the real effective exchange rate index between the United Kingdom and the United States equal to 100 in 2005, and find that the U.S. dollar has changed to a value of 91.4, then from a competitive perspective the U.S. dollar is ________.
A) overvalued
B) undervalued
C) equally valued
D) There is not enough information to answer this question.
15. Exchange rate pass-through may be defined as________
