A flexible exchange rate is determined by
A) the central bank in each country.
B) the federal government in each country.
C) both fiscal and monetary policies only.
D) forces of supply and demand for the currency in the foreign exchange market.
E) buying and selling of foreign exchange reserves.
Correct Answer:
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Q4: If the real exchange rate is high,greater
Q5: According to purchasing power parity,the relationship among
Q6: Under a hard peg,a country
A) has a
Q7: Purchasing power parity assumes
A) no inflationary pressures.
B)
Q8: A hard peg may be achieved by
A)
Q10: A devaluation of the exchange rate is
Q11: In an open economy,the law of one
Q12: Under purely flexible exchange rates,
A) there is
Q13: Purchasing power parity may not hold in
Q14: Purchasing power parity holds if
A) inflation is
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