A Key Assumption Behind the Explanation of Exchange Rate Determination

question 51

Multiple Choice

A key assumption behind the explanation of exchange rate determination in the short run is

• A)trade barriers are unimportant in the short run.
• B)changes in price levels are unimportant in the short run.
• C)exchange rates represent prices of financial assets in one currency relative to prices of similar financial assets in another currency.
• D)trade barriers and changes in price levels are unimportant in the short run.

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