​Assume That the New Zealand Inflation Rate Is Higher Than

question 2

Multiple Choice

​Assume that the New Zealand inflation rate is higher than the U.S. inflation rate. This will cause U.S. consumers to ____ their imports from New Zealand and New Zealand consumers to ____ their imports from the United States. According to purchasing power parity (PPP) , this will result in a(n) ____ of the New Zealand dollar (NZ$) .

• A) ​reduce; increase; appreciation
• B) ​increase; reduce; depreciation
• C) ​reduce; increase; depreciation
• D)reduce; increase; appreciation

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Definitions:

Unselfish Behavior

Actions that prioritize the welfare of others over one's own personal benefit.

Economic System

A particular set of institutional arrangements and a coordinating mechanism for solving the economizing problem; a method of organizing an economy, of which the market system and the command system are the two general types.

Institutional Arrangements

The formal and informal rules, organizations, and practices that structure economic, political, and social interactions in societies.

Coordinating Mechanism

A system or method used to align actions and activities among different parties to achieve a common goal or objective.