In the short run, there are large and persistent deviations between actual exchange rates and exchange rates predicted using purchasing power parity because of:

a. Central bank intervention in the foreign exchange market and sticky prices.
b. Discretionary monetary policy.
c. Discretionary fiscal policy.
d. Widely different inflation rates in the two nations.
e. All of the above.


.A

Economics

You might also like to view...

If the reserve ratio is designated by "r," the amount of deposits a bank can hold as excess reserves is equal to 1 / (1 - r)

Indicate whether the statement is true or false

Economics

Refer to Figure 9.3. The firm's profit it represented by what area?



A. AHID

B. ABCD

C. DCK0

D. EFG0

Economics

Closed shops are shops that are closed to union members

Indicate whether the statement is true or false

Economics

An increase in the MPC causes an increase in which of the following?

A) MPS B) spending multiplier C) savings rate D) exports E) aggregate supply

Economics