Which of the Following Is Not True Regarding "Exchange Rate

question 18

Multiple Choice

Which of the following is not true regarding "exchange rate indexes?"

• A)They will all show the same general trends (i.e., appreciation or depreciation).
• B)Neither economic theory nor practice gives a clear indication of which exchange rate is best.
• C)For short-term movements, there can be large differences across exchange rate indexes.
• D)Exchange rate indexes are used to measure the average value of a currency relative to several other currencies.

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