Exchange Rate Determination in the Short Run Is Underlied by Which

question 134

Multiple Choice

Exchange rate determination in the short run is underlied by which of the following?

• A) Tariffs and quotas affect trade patterns only in the short run.
• B) Prices of goods and services affect trade patterns only in the short run.
• C) Expected returns on financial assets affect investment flows in the short run.
• D) Preferences for goods and services affect trade flows only in the short run.

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Definitions:

Frequency Source

An electronic component or circuit that generates a signal of a specific frequency, used in various types of electronic equipment.

Capacitive Reactance

The resistance a capacitor offers to AC current, dependent on the frequency of the current and the capacitance value.

Parallel Connection

A way of connecting electrical components so that they share the same voltage across them, but can carry different currents.

Frequency Source

A device or system component that generates a signal of a specific frequency.