Author Question: The predictive accuracy of relative purchasing power parity improves if: a. Both countries have ... (Read 55 times)

Collmarie · **on:** Jun 30, 2018

The predictive accuracy of relative purchasing power parity improves if:
a. Both countries have highly mobile capital markets.
b. Both countries have central bank controls in place so that exchange rates change in an orderly manner.
c. Both countries under consideration have high growth rates.
d. Both countries are either developed or undeveloped (i.e., one is not developed and the other undeveloped).
e. You only are predicting the qualitative change in exchange rates and not the specific exchange rate or quantitative change in the exchange rate.

Question 2

The U.S. dollar exchange rate is determined by the:
a. World Bank.
b. Federal Reserve.
c. Forces of supply and demand.
d. International Monetary Fund.
e. U.S. government.