According to the law of one price,at the most basic level,exchange rates are determined by supply and demand.

Question

Quizplus · Accepted Answer

The law of one price states that identical goods should sell for the same price in different markets when there are no transportation costs and no differential taxes applied in the two markets. Exchange rates are influenced by supply and demand, but the law of one price specifically refers to the pricing of goods across different markets.

According to the Law of One Price,at the Most Basic