The Figure Given Below Depicts the Foreign Exchange Market for British

question 31

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-Deviations from purchasing power parity will be increasingly higher as international trade tariffs become more restrictive. This is mainly because:

• A)arbitrage activities become less profitable.
• B)governments discourage purchasing power parity.
• C)the interest rate parity fails to hold.
• D)goods become more differentiated across countries.
• E)individuals develop hatred toward closed economies.

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Definitions:

United States

A country located primarily in North America, consisting of 50 states, a federal district, five major self-governing territories, and various possessions.

China

A country located in East Asia, the world's most populous nation, with a rich history, dynamic economy, and significant global influence.

Child Mortality

Refers to the death of children under the age of five.

Developed Countries

Nations with a high level of economic development and standard of living, characterized by high income per capita, advanced technological infrastructure, and a wide range of services available to citizens.