What factors are not important in determining exchange rate fluctuations in the long run?
A) preferences for domestic and foreign goods across countries
B) speculating in currency markets
C) relative price levels across countries
D) relative rates of productivity growth across countries
B
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For a fixed inflation rate target, an increase in the inflation rate corresponds to a ________ the aggregate demand curve and an increase in exogenous spending corresponds to a ________ the aggregate demand curve.
A. movement up; shift right of B. shift left of; shift right of C. shift left of; movement up D. movement up; movement down
Firms in monopolistic competition have demand curves that are
A) horizontal. B) vertical. C) downward sloping. D) upward sloping. E) U-shaped.
If beef and pork are substitutes for consumers, the cross elasticity of demand between the two products must be
A) negative. B) positive. C) indeterminate. D) elastic. E) greater than 1.
What is perfect price discrimination and why do economists believe that no firm is able to practice perfect price discrimination?
What will be an ideal response?