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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Definitions:

Benzodiazepines

A class of psychoactive drugs used to treat conditions such as anxiety, insomnia, and seizures by enhancing the effect of the neurotransmitter GABA.

Drowsiness

A feeling of being lethargic and sleepy, which can affect concentration and performance in tasks.

Opioid Addiction

A chronic, relapsing disorder characterized by a compulsive need to use opioid drugs, despite harmful consequences.

Steady Increase

A consistent rise or growth in numbers or volume over a period of time.