Suppose That the Price of a Plasma TV Is $1,200

question 44

Multiple Choice

Suppose that the price of a plasma TV is $1,200 in the United States and 13,200 pesos in Mexico. If the current exchange rate is 10 pesos to the dollar, then purchasing power parity theory would predict that in the long run

• A) Mexico will begin to import plasma TVs from the United States.
• B) the exchange value of the peso will depreciate.
• C) the exchange value of the peso will appreciate.
• D) the exchange value of the dollar will depreciate.

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Definitions:

Radial Cleavage

A type of embryonic development in certain animals where cell divisions occur at right angles to one another, typical in deuterostomes.

Coelom

Body cavity of an animal; the method by which the coelom is formed (or lack of formation) is an identifying characteristic in animal classification.

Protostomes

A group of animals characterized by the blastopore (the first opening in the developing embryo) becoming the mouth, including groups like mollusks and annelids.

Deuterostomes

A group in the animal kingdom characterized by the development of the anus from the first opening in the embryo, with the mouth developing later.