If a Market Basket of Goods Cost $100 in the U.S

question 57

True/False

If a market basket of goods cost $100 in the U.S. and €70 in France, then the PPP exchange rate would be $.70/€.

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Definitions:

Capital

Assets such as machinery, buildings, or technology used in the production of goods and services.

Labor

The human effort, both physical and mental, used in the production of goods and services.

Natural Resources

Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.

Oil Reserves

Quantities of crude oil that are discovered and confirmed by geologic and engineering information to be commercially recoverable under existing economic and operating conditions.