The Figure Given Below Depicts the Foreign Exchange Market for British

question 10

Multiple Choice

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

-Which of the following holds true, if goods sell for the same price worldwide when converted to a common currency?

• A)A high rate of inflation exists.
• B)A fixed exchange-rate system exists.
• C)Purchasing power parity exists.
• D)The foreign exchange market is in equilibrium.
• E)Arbitrage opportunities exist.

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