In Some Developing Countries, Different Exchange Rates Apply to Different

question 73

Multiple Choice

In some developing countries, different exchange rates apply to different categories of transaction, and therefore _____

• A) the local currency is not easily convertible to foreign currency.
• B) the local currency is very easily convertible to foreign currency.
• C) the prices of foreign goods fluctuate widely in domestic markets.
• D) the prices of domestic goods fluctuate widely in foreign markets.
• E) domestic investors are more inclined to invest in foreign assets.