Overshooting Is When Exchange Rates

question 81

Multiple Choice

Overshooting is when exchange rates:

• A) adjust more in the short run than they need to for long-run equilibrium.
• B) adjust less in the short run than they need to for long-run equilibrium.
• C) are unable to adjust because of fixed exchange rates.
• D) adjust at the same rate as prices.

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Definitions:

Chemical Bonds

The forces of attraction that hold atoms or ions together in molecules and compounds.

Ionic Bonds

A chemical bond formed between two ions with opposite charges through the electrostatic attraction between them.

Covalent Bonds

Chemical bonds formed by the sharing of electron pairs between atoms.