The Exchange Rate Is Kept the Same Across Geographically-Separate Markets

question 20

Multiple Choice

The exchange rate is kept the same across geographically-separate markets by

• A)hedging.
• B)speculation.
• C)government regulation.
• D)arbitrage.

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Definitions:

Total Revenue

The total amount of money a company generates from the sale of goods or services before any expenses are subtracted.

Demand Elastic

Refers to how sensitive the quantity demanded of a good is to a change in its price; high elasticity indicates consumers will significantly alter their demand in response to price changes.

Price Effect

The impact on the quantity demanded of a good or service resulting from a change in its price, holding all other factors constant.

Quantity Effect

The change in quantity demanded or supplied of a good or service due to a change in its price.