Describe the four determinants of exchange rates in the long run
What will be an ideal response?
One determinant of exchange rates in the long run is relative price levels between countries. If the price level in another country rises faster than the price level in the United States, then the value of the dollar will rise. Another determinant is the relative rates of productivity growth between countries. The country with the faster productivity growth will have the value of their currency rise. Another determinant is the preferences for domestic and foreign goods. An increase in the preferences for a country's goods will increase the value of its currency. Lastly, tariffs and quotas affect exchange rates. Higher tariffs and quotas lead to higher exchange rates.
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Philosopher John Rawls's argument in favor of income equality presumes that with no prior knowledge of where a person would fit into an income distribution, the person's fear of ending up in poverty overshadows his or her joy of ending up rich
Indicate whether the statement is true or false
The aggregate demand is described graphically as a. sloping downward. b. a vertical line
c. a horizontal line. d. sloping upward.