The Big Mac Price Is $4 in Britain and $6

question 75

Multiple Choice

The Big Mac price is $4 in Britain and $6.6 in Switzerland.We then expect

• A)the British currency to depreciate and the Swiss currency to appreciate.
• B)the British currency to appreciate and the Swiss currency to depreciate.
• C)the British and Swiss currencies both to depreciate.
• D)the British and Swiss currencies both to appreciate.

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Definitions:

Tariff

A tax imposed on imported goods and services to increase their price and reduce competition with domestic industries.

Trade Restrictions

Measures imposed by governments to control the import and export of goods and services with the intention of protecting domestic industries, which can include tariffs, quotas, and other barriers.

Efficiency Argument

The principle that resources should be allocated in a way that maximizes the productivity or welfare of a community or economy.

Jobs Argument

A perspective or argument centered on the impacts of economic policies or business decisions on employment levels.