Which of the Following States That for Any Two Countries,the

question 77

Multiple Choice

Which of the following states that for any two countries,the spot exchange rate should change in an equal amount but in the opposite direction to the difference in nominal interest rates between the two countries?

• A)Bandwagon effect
• B)Law of one price
• C)International Fisher effect
• D)Helms-Burton Act
• E)Purchasing power parity (PPP)theory

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a given period.

Demand

The level of demand for products or services that purchasers can and are willing to pay for at numerous prices over a designated period.

Substitutes

Goods or services that can be used in place of each other, with the capability of satisfying similar consumer needs or desires.

Coors

A well-known brewing company based in Golden, Colorado that produces a wide range of beers.