In the Long Run, the Chief Determinant of Exchange Rate

question 101

Multiple Choice

In the long run, the chief determinant of exchange rate changes is a change in

• A)interest rates.
• B)real GDP.
• C)the price of gold.
• D)price levels.

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Definitions:

Liquidity Ratios

Financial metrics used to assess a company's ability to meet its short-term obligations, indicating how quickly assets can be converted into cash.

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated as the company's total liabilities divided by its total assets.

Total Debts

The sum of all financial obligations or liabilities owed by an individual, organization, or country.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or a business cycle, whichever is longer.