When All Changes in the World Are Due to

question 33

Multiple Choice

When all changes in the world are due to

• A) fiscal policy, purchasing power parity holds true in the long run.
• B) monetary policy, purchasing power parity does not hold true in the long run.
• C) monetary policy, purchasing power parity holds true in the long run.
• D) monetary policy, purchasing power parity holds true even in the short run.
• E) fiscal and monetary policy, purchasing power parity holds true in the long run.

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Definitions:

Agricultural Risk Coverage

A form of crop insurance that pays out if the total revenue generated by all the farmers planting a given crop in a given county falls below a predetermined value.

Price Loss Coverage

A form of crop insurance that pays participating farmers if the market price of their output falls below a predetermined value.

Inelastic

Describes a situation where the demand or supply of a good is not significantly affected by changes in price.

Supply

The total amount of a good or service that is available to consumers.