Empirical studies find that exchange rates are much more variable than inflation differentials. How can we explain this empirical result?
What will be an ideal response?
Financial markets adjust faster than goods market. Therefore, for any exogenous shock or news, we expect exchange rates to change faster than prices. Thus the differential speed of adjustment makes exchange rates much more variable.
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Which pair of market structures provides firms with the greatest ability to finance R&D out of retained earnings?
A. Oligopolists and pure monopolists. B. Pure competitors and pure monopolists. C. Pure competitors and monopolistic competitors. D. Monopolistic competitors and pure monopolists.
Other things being equal, a national health insurance program would
A) generate higher life expectancies and lower infant mortality rates. B) generate lower life expectancies and higher infant mortality rates. C) increase total health care expenditures. D) increase the quality of life.