Which of the following factors does not affect the long-run supply and demand conditions of foreign currencies?
A) Relative inflation rates
B) Relative productivity levels
C) Tastes for domestic versus foreign goods
D) All of the above affect the long-run supply and demand conditions of foreign currencies.

Question

Quizplus · Accepted Answer

All the options listed (relative inflation rates, relative productivity levels, and tastes for domestic versus foreign goods) affect the long-run supply and demand conditions of foreign currencies. Inflation rates can influence a currency's value, productivity levels can affect trade balances, and tastes for goods can shift demand for currencies.

Which of the Following Factors Does Not Affect the Long-Run