In the long run,exchange rates are mainly determined by economic fundamentals such as productivity levels of different countries.

Question

Quizplus · Accepted Answer

Economic fundamentals such as productivity levels, trade balances, and interest rates are the main drivers of exchange rates in the long run. However, in the short run, exchange rates can be influenced by factors such as geopolitical events, market sentiment, and speculation.

In the Long Run,exchange Rates Are Mainly Determined by Economic