The relative prices of U.S. goods sold in Europe can change from day to
Day, even though domestic prices for the same goods in the United States are fixed in the short run, because
A) the prices of European goods sold at home are not fixed in the short run.
B) the nominal and not the real exchange rate can move in the very short run.
C) both the real and the nominal exchange rates can move in the very short run.
D) the theory that assumes that prices are fixed in the short run is fallacious.
E) none of the above.
Correct Answer:
Verified
Q3: Suppose that i) the dollar depreciated, ii)
Q4: Suppose that the United States were to
Q5: Purchasing power parity does not hold up
Q6: The sharp decrease in net exports over
Q7: Changes in the real exchange rate
A) reflect
Q9: Assuming the usual relationship between the real
Q10: Net exports for the United States
A) were
Q11: Which of the following could serve
Q12: The trade-weighted exchange rate of the dollar
Q13: The theory of purchasing power parity predicts
A)
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