Which of the following statements is the MOST accurate about the Law of One Price on Scandinavian ferry lines?
A) Due to menu costs, the Law of One Price does not hold.
B) To avoid arbitrage opportunities, the Law of One Price must hold.
C) Transaction costs of exchanging currency causes the Law of One Price to fail.
D) Transportation costs between ferry lines leads to a violation of the Law of One Price.
E) The physical distance allowed the Law of One Price to hold.
C
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Those factors that lead to differences in the proximate causes of prosperity between nations are referred to as:
A) endogenous causes of prosperity. B) implicit causes of prosperity. C) explicit causes of prosperity. D) fundamental causes of prosperity.
If the demand for money decreases, ceteris paribus, the LM curve would:
A) shift right. B) shift left. C) remain constant. D) slope more steeply.