The Chief Cause of Short-Run Changes in Exchange Rates Is

question 26

Multiple Choice

The chief cause of short-run changes in exchange rates is

• A)the world's political situation.
• B)"hot money" chasing high interest rates.
• C)changes in consumer tastes.
• D)central bank interventions.

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Definitions:

Discount Rate

In finance, the rate used to calculate the present value of future cash flows, reflecting the risk and time value of money.

Salvage Value

This refers to the projected remaining worth of an asset upon reaching the conclusion of its operational lifespan.

Payback Period

The time it takes for an investment to generate an amount of income or cash equal to the cost of the investment.

Depreciation

Depreciation is the method of allocating the cost of a tangible or physical asset over its useful life.