-Refer to the Above Information to Answer This Question

question 71

Multiple Choice

-Refer to the above information to answer this question.What is true if price is $52.50?

• A)Price will soon rise.
• B)There is a surplus of 110.
• C)The quantity supplied is 90.
• D)The quantity demanded is 90.
• E)There is a shortage of 40.

---

Definitions:

Interest Rate Parity

A theory stating that the difference between the interest rates of two countries is equal to the differential between the forward exchange rate and the spot exchange rate of their currencies.

Forward Exchange Rate

An agreed exchange rate for a currency transaction that will occur at a future date.

Spot Exchange Rate

The current price for exchanging one currency for another, available for immediate delivery.

Interest Rate Parity

An economic theory that suggests the difference in interest rates between two countries will be equal to the difference in exchange rates between their currencies.