A. domestic prices adjust slowly to shifts in demand
B. military spending during military conflicts
C. elasticities are smaller in the long run than the short run
D. elasticities are smaller in the short run than the long run
Related Mcqs:
- Which exchange rate system involves a leaning against the wind|| strategy in which short-term fluctuations in exchange rates are reduced without adhering to any particular exchange rate over the long run ?
A. pegged of fixed exchange rates
B. adjustable pegged exchange rates
C. managed floating exchange rates
D. free floating exchange rates - Suppose that the purchasing power parity estimate of the dollar/euro exchange rate is $1.30 per euro, and the current spot rate is $1.3 8 per euro. Comparing these two exchange rates from a long-run viewpoint you would ?
A. anticipate the dollar to depreciate against the euro
B. anticipate the dollar to appreciate against the euro
C. anticipate the dollar’s exchange rate against the euro to remain constant
D. have no anticipation concerning future movements in the dollar/euro exchange rate - What is the rate of exchange or exchange rate ?
A. Power to buy foreign currency
B. Foreign currency holding
C. Ratio at which unit of one country’s currency is exchanged for unit of another country currency
D. None of them - The University of Pennsylvania researchers Summers and Heston compute the price level of GDP as the ratio of purchasing power parity (PPP) exchange rate to the actual exchange rate where ?
A. both exchange rates are measured s the domestic currency price of the US-dollar
B. both exchange rates are not converted into international dollars
C. both exchange rate are pegged
D. both exchange rate are converted into Big Mac PPP formula - In a fixed exchange rate regime, the central the exchange rate ?
A. selling, increase
B. buying reduce
C. selling, reduce
D. buying increase
E. A and B
F. C and D - Which exchange rate system does not require monetary reserves for official exchange rate intervention ?
A. floating exchange rates
B. pegged exchanged rates
C. managed floating exchange rates
D. dual exchange rates - Which exchange rate mechanism in intended to insulate the balance of payments from short-term capital movements while providing exchange rate stability for commercial transactions ?
A. dual exchange rates
B. managed floating exchange rates
C. adjustable pegged exchange rates
D. crawling pegged exchange rates - The exchange rate is the ratio at which the currency of one country is exchanged for the currency of another. Which method was developed by the World bank to exchange rates ?
A. Breton Wood method
B. Free market exchange rate
C. Atlas method of exchange rate
D. Open market exchange rate - Under floating exchange rates, expectations of higher interest rates are likely to cause an ____ of the exchange rate?
A. depreciation
B. appreciation
C. fall
D. devaluation - If one country, with floating exchange rates, has higher inflation than its competitors we would expect its exchange rate to ?
A. appreciate
B. depreciate
C. revalue
D. be in short supply
