Ultimately, Exchange Rates Are Determined by

question 73

Multiple Choice

Ultimately, exchange rates are determined by

• A)the lending of foreign national banks.
• B)the buying of foreign exchange traders.
• C)the forces of supply and demand.
• D)each country via their monetary policy only.

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Definitions:

Productive Efficiency

A situation in which an economy or entity can no longer produce additional amounts of a good without lowering the production level of another product.

Substitute Goods

Products or services that can be used in place of each other, having a positive cross-elasticity of demand.

Productive Efficiency

A situation in which a good or service is produced at the lowest possible cost.

Quantity of Goods

The total number of physical units of a product or commodity that are available in the market.