In Equilibrium, All Traded Goods Sell at the Same Price

question 148

Multiple Choice

In equilibrium, all traded goods sell at the same price internationally. If the same goods are expressed in their home prices, then the ratio of the prices is equal to:

• A) one.
• B) zero.
• C) the rate of interest.
• D) the nominal exchange rate between the two currencies.

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Definitions:

Race

A socially constructed categorization of humans based on physical characteristics, ancestry, genetics, and social identity.

Ethnic Group

A society or populace comprised of members with similar cultural roots or lineage.

Split Labour Market

A theory explaining the division of the labor market into separate segments, often along racial or ethnic lines, leading to conflicts and disparities in wage and employment conditions.

Policy Measures

Actions, strategies, or laws undertaken by government or organizations to address specific issues or achieve targeted outcomes.