Short-run movements in nominal exchange rates are primarily due to:
A. inflation differentials.
B. changing prices of goods and services in the countries involved.
C. changing expected rates of return on domestic and foreign assets.
D. changes in exports.
Answer: C
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If the Fed was to use all of its three most common tools to increase the money supply, it would:
a. buy bonds, reduce the discount rate, and reduce reserve requirements. b. sell bonds, reduce the discount rate, and reduce reserve requirements. c. sell bonds, reduce the discount rate, and increase reserve requirements. d. sell bonds, increase the discount rate, and increase reserve requirements.
Enacting a law controlling rents near a major university will increase the affordable housing for college students
a. True b. False Indicate whether the statement is true or false
If the price of hand calculators falls from $10 to $9 and, as a result, the quantity demanded increases from 100 to 125, then:
A. demand is elastic. B. demand is inelastic. C. demand is of unit elasticity. D. not enough information is given to make a statement about elasticity.
If an investment requires payment of $5,000 now and promises to return a single payout of $15,000 one year from now, the net present value of the investment at an interest rate of 10% is approximately
A. $13,636. B. $10,000. C. $3,636. D. $8,636.