Deviations from the International Currency Parity Relationships May Occur Because

question 24

Multiple Choice

Deviations from the international currency parity relationships may occur because of

• A)free capital movements across national boundaries.
• B)barriers to cross-border financial flows.
• C)perfect rationality of market participants.
• D)differences in each country's productive capacity.

---

Definitions:

Producer Surplus

Producer surplus is the difference between what producers are willing to accept for a good or service versus what they actually receive, reflecting extra benefit.

Complements In Consumption

Goods that are often used together, where the increase in demand for one leads to an increase in demand for the other.

Supply Curve

A graph showing the relationship between the price of a good and the quantity of the good that producers are willing to sell at that price.

Producer Surplus

The variance between what producers are prepared to take for a product or service and what they end up getting.