The overriding factor in analyzing long-run changes in the exchange rate is:
a. the exchange rate in the period t- 1.
b. how a permanent change in the supply of money is transmitted to prices and interest rates.
c. the reaction of traders as they conduct arbitrage and speculation.
d. the notion that there is no long run, only a series of short-run measurements.
Ans: b. how a permanent change in the supply of money is transmitted to prices and interest rates.
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Refer to the graph shown. Total utility is at its maximum at point:
A. A. B. B. C. C. D. D.