Which of the Following Is True of the Determination of Exchange

question 80

Multiple Choice

Which of the following is true of the determination of exchange rates?

• A)Differences in relative demand and supply do not explain the determination of exchange rates.
• B)Differences in relative demand and supply explain the factors underlying the phenomenon behind the demand for and supply of a currency.
• C)The differences in relative demand and supply alone provide a high-level understanding of what's behind the determination of exchange rates.
• D)While the differences in relative demand and supply provide an accurate explanation for appreciation of currencies, they fail to explain depreciation.
• E)The differences in relative demand and supply cannot explain or predict the conditions under which a particular currency will be in demand or not.