The total amount of money that is brought in by sales
as more of one good is produced, less of the other can be produced.
<h3>What is production ?</h3>
Production is the process of merging diverse immaterial inputs (plans, knowledge) with material inputs to create something that is intended for consumption (output). It is the process of producing an output, a good or service that has value and enhances people's usefulness. Production theory, a branch of economics that focuses on production, is entwined with the consumption (or consumer) theory of economics.
Utilizing the initial inputs productively leads to the production process and output (or factors of production). Land, labor, and capital are regarded as the three major production components and are referred to as primary producer commodities or services. Both the output process and the final product do not considerably change these essential inputs or turn them into integral parts of the final product.
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Answer:
the franc would appreciate by 95% against ruble or in other words,exchange rate of franc ruble would depreciate 95% given 100% inflation in russia and 5% in switzerland
Explanation:
Give that
Inflation rate in russia = 100%
And inflation rate in switzerland = 5%
The difference in inflation = 100% - 5%
= 95%
The ppp says ruby would depreciate by 95% against the franc
So under purchasing power parity, exchange rate of franc /ruble would depreciate 95% given 100% inflation in russia and 5% in switzerland.
Or we say franc appreciates by 95% against ruble
