If the Real Exchange Rate Between the U

question 64

Multiple Choice

If the real exchange rate between the U.S.and Argentina is 1,then

• A)purchasing-power parity holds,and 1 U.S.dollar buys 1 Argentinean bolivar.
• B)purchasing-power parity holds,and the amount of dollars needed to buy goods in the U.S.is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina.
• C)purchasing-power parity does not hold,but 1 U.S.dollar buys 1 Argentinean bolivar.
• D)purchasing-power parity does not hold,but the amount of dollars needed to buy goods in the U.S.is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina.

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Definitions:

Grape Pickers

Workers who manually or mechanically harvest grapes from vineyards.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to offer for sale.

Supply

The overall quantity of a particular product or service that is accessible to buyers.

Demand

The desire and ability of consumers to purchase a good or service at a given price.