The Dominant Forces Causing Changes in Exchange Rates in the Very

question 104

Multiple Choice

The dominant forces causing changes in exchange rates in the very short run are

• A) changes in relative interest rates
• B) changing expectations regarding future exchange rates
• C) economic fluctuations
• D) the erratic spending patterns of tourists
• E) changes in relative interest rates and in expectations of future exchange rates

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Definitions:

Plato's Metaphysics

The branch of philosophy in Plato's works that studies the nature of reality, including the theory of Forms, where abstract forms or ideas possess the highest and most fundamental kind of reality.

Heraclitus

An ancient Greek philosopher known for his theory that change is the fundamental essence of the universe, encapsulated by the phrase "everything flows".

Pythagoras

An ancient Greek philosopher and mathematician known for formulating the Pythagorean theorem in geometry.

Spinoza

Baruch Spinoza, a philosopher of Portugese-Jewish origin, who proposed that God and Nature were two names for the same reality, leading to his excommunication from the Jewish community.