One of the Most Fundamental Determinants of the Exchange Rate

question 98

Multiple Choice

One of the most fundamental determinants of the exchange rate is ______________ whereby the exchange rate between the currencies of two countries is in equilibrium
When it equates the prices of a basket of goods and services in both countries.

• A) free float
• B) free float (dirty)
• C) managed float
• D) purchasing power parity (PPP)
• E) absolute cost advantage

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Definitions:

Production Departments

Specific areas or units within a manufacturing facility where different stages of the production process are carried out.

Budgeted Amounts

Estimated financial figures used for planning during a specific period, including income, expenses, and capital expenditures.

Fluctuations

Variations or changes in level, degree, or value that occur over time.

Responsibility Centres

Sections or departments within an organization, each overseen by a manager who is accountable for its performance and financial outcomes.