OPEC Provides an Example of

question 280

Multiple Choice

OPEC provides an example of

• A)an unwritten, informal understanding.
• B)non-collusive oligopoly.
• C)an international cartel.
• D)a monopolistically competitive industry.

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Definitions:

Nominal Exchange Rate

The rate at which one currency can be exchanged for another currency, not adjusted for inflation.

Real Exchange Rate

The rate at which two currencies can be exchanged after adjusting for inflation differences.

Purchasing-Power Parity

An economic theory stating that in the absence of transaction costs and with efficient markets, equivalent goods should have the same price when converted into a common currency.

Purchasing-Power Parity

A theory which posits that currencies are in equilibrium in terms of exchange rates when the purchasing power in both countries is identical.