Regarding short-range exchange rate movements, which of the following statements is NOT true?
a. they may vary from week to week
b. they may vary from hour to hour
c. are similar to those of the transaction demand determinants of long-term trends in exchange rates
d. determined by arbitrage activity
e. both a and b are false
c
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What does the quantity theory of money imply? If the growth rate of money supply and growth rate of real GDP in an economy are 8% and 6%, respectively, then what is the inflation rate in the economy?
What will be an ideal response?
On a graph, high correlation between the variable measured along the x-axis and the variable measured along the y-axis
A) means that changes in the variable measured along the x-axis must cause changes in the variable measured along the y-axis. B) means that changes in the variable measured along the y-axis must cause changes in the variable measured along the x-axis. C) means that changes in either variable must cause changes in the other variable. D) does NOT mean that a change in the variable measured along the x-axis must cause a change in the variable measured along the y-axis.
Harvey Morris bought dishes and pitchers made of blue glass during the Great Depression at a flea market. He later resold these items on eBay. The profits Harvey earned from these sales are
A) not economic profits because Harvey did not add value to the items but took advantage of the buyers who were not aware of how much Harvey paid for the items. B) the result of arbitrage. C) accounting profits but not economic profits. D) subject to a retail profits tax.
According to the above figure for a gasoline market, at a price of $1 per gallon of gasoline, there would be
A) a shortage of 30 million gallons. B) a surplus of 30 million gallons. C) a shortage of 20 million gallons. D) a surplus of 50 million gallons.