Figure 21-8 ​

question 176

Multiple Choice

Figure 21-8 ​
​
-Refer to Figure 21-8. What is the consumer's marginal rate of substitution as she moves from A to B?

• A)4
• B)2
• C)1
• D)0.5

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Definitions:

New York Stock Exchange

One of the largest stock exchanges in the world, located in New York City, where stocks are bought and sold.

Relative Purchasing Power Parity

An economic theory that states the rate of exchange between two currencies will adjust to reflect changes in the price levels of the two countries.

Absolute Exchange Rate

An exchange rate that directly compares the purchasing power of two different currencies.

Inflation Rates

The rate at which the general level of prices for goods and services is rising, concurrently eroding purchasing power, usually expressed as a percentage.