If the Prices for the Same Goods and Services Are

question 62

Multiple Choice

If the prices for the same goods and services are different in two nations, the exchange rate adjusts
Over the long run to achieve

• A)interest rate parity.
• B)balance of payments account between the two nations equal to zero.
• C)a zero current account balance between the two nations.
• D)zero net exports for each nation.
• E)purchasing power parity between the two currencies.

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Definitions:

Percentage Change

A mathematical calculation that shows how much a quantity has increased or decreased as a proportion of its former value.

Complementary Products

Goods or services that enhance or are used together with another, increasing the overall value of the primary product.

Hot Dogs

A cooked sausage, traditionally grilled or steamed and served in a sliced bun as a fast-food.

Salad Dressing

A liquid or semi-liquid condiment added to salads to enhance flavor, ranging from simple vinaigrettes to creamy dressings.