An Important Effect of Foreign Currency Speculators Is That

question 80

Multiple Choice

An important effect of foreign currency speculators is that

• A)they have consistently lost money and have left the market.
• B)they have pushed exchange rates to wider extremes than most economists predicted.
• C)they actually limit the volatility of exchange rate movements.
• D)they have had no effect at all on exchange rate volatility.

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Definitions:

Total Variable Cost

The sum of all variable costs that change in proportion with the level of output or activity.

Total Annual Fixed Costs

The sum of all consistent, non-variable expenses that a company incurs over the course of a year.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded by consumers, typically sloping downward from left to right.

Sales Price

The amount of money for which a product or service is sold to the customer.