The law of one price states that if transportation costs are relatively small, then the:
A) nominal exchange rates for every country's currency must be equal.
B) nominal exchange rate for a currency must equal the real exchange rate for that currency.
C) price of an internationally traded commodity must be the same in all locations.
D) producer with the lowest opportunity cost should be the only producer any commodity.
Correct Answer:
Verified
Q55: Suppose the price of gold is $300
Q56: The purchasing power parity theory is a
Q57: Suppose the price of gold is initially
Q58: The principal demanders of U.S. dollars in
Q59: The price of gold is $300 per
Q61: The U.S. dollar exchange rate, e, expressed
Q62: Holding all else constant, a decrease in
Q63: As the dollar exchange rate, e, decreases,
Q64: Each of the following would increase the
Q65: Holding all else constant, an increase in
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents