The only reason that exchange rates change is because overall price levels in the countries change

Indicate whether the statement is true or false


FALSE
Explanation: Relative price changes, in addition to inflation, can change the exchange rates.

Economics

You might also like to view...

According to your textbook, the current war on drugs in the United States has similar consequences to the earlier prohibition on alcohol. The similar consequences include

A) an underground supply and demand process. B) the production of more powerful and dangerous forms of the illegal products. C) production and distribution being controlled by people with a comparative advantage in crime D) All of the above. E) None of the above.

Economics

A person with a diminishing marginal utility of income

A) will be risk averse. B) will be risk neutral. C) will be risk loving. D) cannot decide without more information

Economics

The law of diminishing marginal utility is consistent with the consumer behavior that produces a negatively sloped demand curve

a. True b. False Indicate whether the statement is true or false

Economics

The development of instantaneous electronic communication and transaction markets has increased the potential for market arbitrage

Indicate whether the statement is true or false

Economics