If the Price of Yoo-Hoo Is $US2

question 74

Multiple Choice

If the price of Yoo-hoo is $US2.00 in New York and $US1.00 in St.Petersburg (after converting the rubles to dollars) ,you might expect __________.

• A)people to buy Yoo-hoo in St.Petersburg and sell it in New York until the price was the same in each country.
• B)people to buy Yoo-hoo in New York and sell it in St.Petersburg until the price was the same in each country.
• C)people to buy Yoo-hoo in St.Petersburg and sell it in New York and the price difference would remain.
• D)the price difference to exist forever.
• E)None of the above is correct.

Understand the impact of changes in the equilibrium interest rate on the economy, including output and investment allocation.

Identify and calculate the real interest rate from given nominal rates and inflation rates.

Grasp the relationship between nominal, real interest rates, and inflation.

Analyze the effects of usury laws on the economy, including their impact on loan availability and market dynamics.

---

Definitions:

Executive Control Centre

A component of the brain responsible for regulating attention, problem-solving, and adaptable behavior in complex situations.

Prefrontal Cortex

The frontal part of the brain involved in complex behaviors such as planning, decision making, and moderating social behavior.

Adolescent Behaviour

The range of actions and manners displayed by individuals navigating the transition from childhood to adulthood, characterized by exploration, identity formation, and emotional development.

Adolescence

The transition period from childhood to adulthood, marked by significant physical, psychological, and social changes.