The Theory That Nominal Exchange Rates Are Determined So That

question 57

Multiple Choice

The theory that nominal exchange rates are determined so that the law of one price holds is called:

• A)the fixed-exchange-rate rule.
• B)the equilibrium principle.
• C)the law of supply and demand.
• D)purchasing power parity.

---

Definitions:

Occipitofrontalis

A muscle of the scalp that plays a role in facial expressions, such as raising the eyebrows.

Levator Palpebrae Superioris

The muscle responsible for elevating the upper eyelid, crucial for opening the eye.

Auricular

Pertaining to the ear or hearing; sometimes also referring to structures resembling an ear or earlobe.

Mentalis Muscles

A pair of muscles at the tip of the chin, responsible for protruding the lower lip, contributing to facial expressions like pouting.