Exchange rate expectations:
A. affect exchanges rates and are more important than fundamentals in the short run.
B. affect exchange rates, but only in the long run.
C. affect exchange rates but are not as important as fundamentals in the short run.
D. do not affect exchange rates in the short run or the long run.
Answer: A
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The compensated demand curve only responds to the income effect from a price change
Indicate whether the statement is true or false
Refer to the accompanying figure, which shows the market for cups of coffee. At the original market equilibrium:
A. 60 cups are sold per hour at a price of $1.50 each. B. 50 cups are sold per hour at a price of $2.50 each. C. 50 cups are sold per hour at a price of $1.00 each. D. 40 cups are sold per hour at a price of $2.00 each.
Recall the Application about the decrease in the price of wool in the 1990s to answer the following question(s). In the 1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In 2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool.Recall the Application. As the world price of wool decreased, the quantity of wool supplied by individual ranchers would ________, and the quantity supplied in the world market would ________.
A. increase; increase B. increase; decrease C. decrease; decrease D. decrease; increase
The concept of time preference in financial investing rests on the belief that people:
A. are indifferent between present and future consumption. B. are patient. C. are impatient. D. intentionally consume 50 percent of assets in the present and 50 percent in the future.