-In the Figure Above,the Economy Is at Point a When

question 170

Multiple Choice

-In the figure above,the economy is at point A when the price level falls to 100.Money wage rates and all other resource prices remain constant.Firms are willing to supply output equal to

• A) $12.5 trillion.
• B) $13.0 trillion.
• C) $13.5 trillion.
• D) None of the above answers is correct.

---

Definitions:

Indian Rupees

The official currency of India, abbreviated as INR, used as a medium of exchange within the country.

Absolute Purchasing Power Parity

A theory that suggests that in the absence of transaction costs and other barriers, the purchasing power of a currency is the same domestically as it is abroad.

Forward Exchange Rates

The exchange rates at which two parties agree to exchange currencies at a future date.

Interest Rate Parity

A financial theory stating the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.