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Author Question: What factors are not important in determining exchange rate fluctuations in the long run? A) ... (Read 87 times)

KWilfred

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on: Jun 29, 2018
What factors are not important in determining exchange rate fluctuations in the long run?
 
  A) preferences for domestic and foreign goods across countries
  B) speculating in currency markets
  C) relative price levels across countries
  D) relative rates of productivity growth across countries

Question 2

Why might a firm remain in operation even if it is earning zero economic profit?
 
  What will be an ideal response?


Tonyam972

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Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

If a firm is earning zero economic profit, it is earning a normal rate of return. Thus, the opportunity costs of all factors of production have been covered.


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