The law of one price (LOOP) indicates that:
a. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country.
b. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country.
c. All the above.
d. None of the above.
e. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits.
Question 2 - Which of the following is not an exchange rate system?
a. Purchasing power parity
b. Fixed exchange rates
c. Flexible exchange rates
d. Fixed rates within bands
e. Managed floating
Question 3 - The law of one price (LOOP) indicates that:
a. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country.
b. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country.
c. The quantity produced of a good in one country should be equal to the exchange-rate-adjusted quantity produced of the same product in another country.
d. None of the above.
e. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits.
Question 4 - Which of the following is not an exchange rate system?
a. Flexible exchange rates
b. Crawling peg
c. Fixed exchange rates
d. Managed floating
e. Purchasing power parity
Question 5 - The law of one price (LOOP) indicates that:
a. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits.
b. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country.
c. The quantity produced of a good in one country should be equal to the exchange-rate-adjusted quantity produced of the same product in another country.
d. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country.
e. All the above.
Question 6 - Which of the following is not an exchange rate system?
a. Purchasing power parity
b. Crawling peg
c. Fixed exchange rates
d. Flexible exchange rates
e. Fixed rates within bands
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