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Purchasing-power parity theory does not hold at all times because ()

A. many goods are not easily transported.
B. the same goods produced in different countries may be imperfect substitutes for each other.
C. Both a and b are correct.
D. prices are different across countries.

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Imagine that a bushel of wheat costs $3.20 in the United States and costs 20 pesos in Mexico. If the nominal exchange rate is 10 pesos per dollar, the real exchange rate is ()

A. 1.60
B. 1.25
C. 0.625
D. None of the above is correct.

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Imagine that a bushel of wheat costs $3.20 in the United States and costs 20 pesos in Mexico. If the nominal exchange rate is 10 pesos per dollar, the real exchange rate is ()

A. 1.60
B. 1.25
C. .625
D. None of the above is correct.

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In an open economy, the demand for loanable funds comes from ()

A. only those who want to borrow funds to buy domestic capital goods.
B. only those who want to borrow funds to buy foreign assets.
C. those who want to borrow funds to buy either domestic capital goods or foreign assets.
D. neither those who want to borrow funds to buy domestic capital goods nor those who want to borrow funds to buy foreign assets.

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In the country of Shem, the CPI is calculated using a market basket consisting of 5 apples, 4 loaves of bread, 3 robes and 2 gallons of gasoline. The per-unit prices of these goods have been as follows. Using 2002 as the base year, what was the inflation rate between 2004 and 2005? ______ (please write a percentage number, e.g. 15%)YearApplesBreadRobesGasoline2002$1.00$2.00$10.00$1.002003$1.00$1.50$9.00$1.502004$2.00$2.00$11.00$2.002005$3.00$3.00$15.00$2.50

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Purchasing-power parity theory does not hold at all times because ()

A. many goods are not easily transported. B. the same goods produced in different countries may be imperfect substitutes for each other. C. Both a and b are correct. D. prices are different across countries.

Imagine that a bushel of wheat costs $3.20 in the United States and costs 20 pesos in Mexico. If the nominal exchange rate is 10 pesos per dollar, the real exchange rate is ()

Imagine that a bushel of wheat costs $3.20 in the United States and costs 20 pesos in Mexico. If the nominal exchange rate is 10 pesos per dollar, the real exchange rate is ()

In an open economy, the demand for loanable funds comes from ()

A. many goods are not easily transported.
B. the same goods produced in different countries may be imperfect substitutes for each other.
C. Both a and b are correct.
D. prices are different across countries.