14-55 Deviations from the international currency parity relationships may occur because of
A)free capital movements across national boundaries.
B)barriers to cross-border financial flows.
C)perfect rationality of market participants.
D)differences in each country's productive capacity.
E)Basel capital regulations.

Question

Quizplus · Accepted Answer

Deviations from international currency parity relationships can occur due to barriers to cross-border financial flows, which can prevent the free movement of capital and lead to discrepancies in currency values.

14-55 Deviations from the International Currency Parity Relationships May Occur