If Purchasing Power Parity Holds,then If the Price of a Basket

question 11

Multiple Choice

If purchasing power parity holds,then if the price of a basket of goods in the U.S.rose from $1,500 to $2,000 and the price of the same basket in Mexico rose from 12,000 pesos to 18,000 pesos

• A)inflation was higher in the U.S.than Mexico so the U.S.dollar would appreciate.
• B)inflation was higher in the U.S.than Mexico so the U.S.dollar would depreciate.
• C)inflation was lower in the U.S.than Mexico so the U.S.dollar would appreciate.
• D)inflation was lower in the U.S.than Mexico so the U.S dollar would depreciate.

---

Definitions:

Secreted by the Hypothalamus

Produced and released by the hypothalamus, a region of the brain responsible for hormone production and regulation.

Orexin

A type of neuropeptide that plays an important role in regulating arousal, wakefulness, and appetite.

Set Point

A theory suggesting that individuals have a pre-set, natural body weight or condition that the body regulates and tends to maintain.

Physical Activity

Any bodily movement produced by skeletal muscles that requires energy expenditure, including activities undertaken while working, playing, carrying out household chores, traveling, and engaging in recreational pursuits.