In General, Exchange Rates

question 197

Multiple Choice

In general, exchange rates

• A) are determined by the planning agencies of governments.
• B) are determined by demand and supply.
• C) adjust slowly to equilibrium.
• D) are determined by central banks.

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Definitions:

Maximum Imposed Price

Refers to a price ceiling, which is the highest legal price that can be charged for a product or service, typically set by the government.

Government

The organization or system through which a society or community is governed, typically consisting of various institutions and authorities.

Market

Any structure that allows buyers and sellers to exchange any type of goods, services, and information.

Perfectly Inelastic

A situation in demand where the quantity demanded does not change regardless of changes in price.