In a competitive market, a decrease in consumer demand leads to

In most of the financial crises of the last decade, there were large and sudden financial outflows as both home and foreign investors tried to avoid the expected crises

Indicate whether the statement is true or false

The theory of purchasing power parity assumes that

A) movements in nominal exchange rates are the result of movements in relative price levels. B) real exchange rates are volatile. C) movements in nominal exchange rates are the result of movements in real exchange rates. D) inflation rates are roughly the same in most countries.