The Overriding Factor in Analyzing Long-Run Changes in the Exchange

question 137

Multiple Choice

The overriding factor in analyzing long-run changes in the exchange rate is:

• A) the exchange rate in the period t - 1.
• B) how a permanent change in the supply of money is transmitted to prices and interest rates.
• C) the reaction of traders as they conduct arbitrage and speculation.
• D) the notion that there is no long run, only a series of short-run measurements.

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