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QUESTION 25 Purchasing power parity implies that if inflation in China increases, then the nominal exchange rate between Chinese Yuan and NZ Dollar (CHyen/NZ$) will O decrease (i.e. a depreciation of the NZ$). O remain unchanged. O increase (i.e. an appreciation of the NZ$). O None of the above. QUESTION 26 If purchasing power parity were to hold even in the short run, then O the real exchange rate should equal one. O the real exchange rate should tend to decrease over time. O the nominal exchange rate should be stable over time. O the domestic and foreign price levels should be constant over time. QUESTION 27 Which of the following events will cause the value of the US dollar to appreciate? O A fall in the average prices of European goods. O Changing preferences of US consumers toward Asian products. O Increased demand for foreign assets by US investors. O Increased demand for US exports. Screenshot

QUESTION 25 Purchasing power parity implies that if inflation in China increases, then the nominal exchange rate between Chinese Yuan and NZ Dollar (CHyen/NZ$) will O decrease (i.e. a depreciation of the NZ$). O remain unchanged. O increase (i.e. an appreciation of the NZ$). O None of the above. QUESTION 26 If purchasing power parity were to hold even in the short run, then O the real exchange rate should equal one. O the real exchange rate should tend to decrease over time. O the nominal exchange rate should be stable over time. O the domestic and foreign price levels should be constant over time. QUESTION 27 Which of the following events will cause the value of the US dollar to appreciate? O A fall in the average prices of European goods. O Changing preferences of US consumers toward Asian products. O Increased demand for foreign assets by US investors. O Increased demand for US exports. Screenshot

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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QUESTION 25 Purchasing power parity implies that if inflation in China increases, then the nominal exchange rate between Chinese Yuan and NZ Dollar (CHyen/NZ$) will O decrease (i.e. a depreciation of the NZ$). O remain unchanged. O increase (i.e. an appreciation of the NZ$). O None of the above. QUESTION 26 If purchasing power parity were to hold even in the short run, then O the real exchange rate should equal one. O the real exchange rate should tend to decrease over time. O the nominal exchange rate should be stable over time. O the domestic and foreign price levels should be constant over time. QUESTION 27 Which of the following events will cause the value of the US dollar to appreciate? O A fall in the average prices of European goods. O Changing preferences of US consumers toward Asian products. O Increased demand for foreign assets by US investors. O Increased demand for US exports. Screenshot
Transcribed Image Text:QUESTION 25 Purchasing power parity implies that if inflation in China increases, then the nominal exchange rate between Chinese Yuan and NZ Dollar (CHyen/NZ$) will O decrease (i.e. a depreciation of the NZ$). O remain unchanged. O increase (i.e. an appreciation of the NZ$). O None of the above. QUESTION 26 If purchasing power parity were to hold even in the short run, then O the real exchange rate should equal one. O the real exchange rate should tend to decrease over time. O the nominal exchange rate should be stable over time. O the domestic and foreign price levels should be constant over time. QUESTION 27 Which of the following events will cause the value of the US dollar to appreciate? O A fall in the average prices of European goods. O Changing preferences of US consumers toward Asian products. O Increased demand for foreign assets by US investors. O Increased demand for US exports. Screenshot
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