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Author Question: When EP /P rises A) IM will rise. B) IM will fall. C) IM may rise or fall. D) IM is not ... (Read 80 times)

karen

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on: Jun 30, 2018
When EP /P rises
 
  A) IM will rise.
  B) IM will fall.
  C) IM may rise or fall.
  D) IM is not affected.
  E) IM and P will both rise.

Question 2

Why is it true that exchange rates tend to be equal worldwide? Briefly explain.
 
  What will be an ideal response?


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Briannahope

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Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

Explain that arbitrage would result in equal exchange rates, and end when transactions costs are equal to the difference in exchange rates.


karen

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

bigsis44

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Reply 3 on: Yesterday
Excellent

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