Under the Gold Standard, the Calculation of Each Currency's Par

question 114

Multiple Choice

Under the gold standard, the calculation of each currency's par value was based on the concept of ________.

• A) the international Fisher effect
• B) nominal and real interest rates
• C) purchasing power parity
• D) the law of one price

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Definitions:

Marginal Revenue

The augmented income obtained by selling one more unit of a good or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of output.

Competitive Market

A market structure characterized by a large number of buyers and sellers, such that no single participant can significantly influence price.

Marginal Cost

The increase in cost that arises from producing an additional unit of output.