If Purchasing-Power Parity Holds,then Changes in Domestic Saving Will _____
If purchasing-power parity holds,then changes in domestic saving will _____ the real exchange rate.
C) not change
D) either increase or decrease
According to purchasing power-parity,if the dollar price of oil is higher in Toronto than in London,arbitrageurs will _____ oil in Toronto and _____ oil in London to drive _____ the price of oil in Toronto.
A) buy; sell; up
B) buy; sell; down
C) sell; buy; up
D) sell; buy; down
The law of one price is enforced by:
In the basic model of a small open economy,if consumer confidence falls and consumers decide to save more,then the real exchange rate:
A) rises and net exports fall.
B) and net exports both rise.
C) falls and net exports rise.
D) and net exports both fall.