In the Short Run,equality of Interest Rates Across Country Boundaries

question 15

Multiple Choice

In the short run,equality of interest rates across country boundaries is ________.

• A) unlikely
• B) a good description of reality
• C) a good description of purchasing power parity
• D) a result of stable foreign currency markets

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Definitions:

Marginal Utility

The change in total utility a person receives from consuming one additional unit of a good or service.

Total Utility

The total satisfaction received from consuming a particular quantity of a good or service.

Average Utility

The total utility received from a certain amount of goods or services divided by the number of goods or services consumed.

Diminishing Marginal Utility

The principle that as a person consumes more of a good, the additional satisfaction gained from consuming an additional unit decreases.