Why is it true that exchange rates tend to be equal worldwide? Briefly explain
What will be an ideal response?
Explain that arbitrage would result in equal exchange rates, and end when transactions costs are equal to the difference in exchange rates.
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The present value of a sum of money to be received in future is high if ________
A) the money is invested for a long period of time B) the market rate of interest is low C) the rate of inflation is high D) the future payment is low
The graphical result of a binding price ceiling is:
a. quantity demanded at the price ceiling exceeds the amount at the equilibrium price, and quantity supplied is less than the amount at the equilibrium price. b. quantity supplied at the price ceiling exceeds the amount at the equilibrium price, and quantity demanded is less than the amount at the equilibrium price. c. quantity demanded and quantity supplied at the price ceiling are equal at the equilibrium price. d. quantity demanded at the price ceiling is less than the amount at the equilibrium price, and quantity supplied is also less than the amount at the equilibrium price