(Figure: Double Shift A) the Market Is Currently at Equilibrium

question 137

Multiple Choice

(Figure: Double Shift A) The market is currently at equilibrium at point
The market is currently at equilibrium at point A. Which of these represents an increase in quantity supplied, but no change in supply?

• A) Point A
• B) Point B
• C) Point C
• D) Point D

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Definitions:

Unbiased Forward Rate

Theoretically, a forward rate in the currencies market that is equal to the spot rate adjusted for interest rate differentials, without any prediction of future direction.

Forward Rate

The agreed-upon price for a financial transaction that will occur at a future date, often used in the context of foreign exchange or interest rates.

Spot Rate

The current market price of a currency, security, or commodity available for immediate settlement.

Absolute Purchasing Power Parity

A theory that suggests that, in the absence of transaction costs and other barriers, identical goods and services in different countries should have the same price when expressed in a common currency.