Fluctuations in exchange rates, other things remaining the same, ...

[sheilaspns]

Fluctuations in exchange rates, other things remaining the same, creates a situation in which money buys the same amount of goods and services in different currencies.
 
   What does the previous statement describe? Will these fluctuations occur in the short run or the long run?

Question 2

For a risk-averse individual, as wealth increases, total utility
 
  A) increases at a decreasing rate.
  B) increases at a constant rate.
  C) increases at an increasing rate.
  D) is constant.

[asdfasdf]

Answer to Question 1

The statement describes purchasing power parity, the proposition that money will buy the same amount of goods and services in different currencies. The effects of purchasing power parity will change the exchange rate in the long run. In the short run, deviations from purchasing power parity can occur.

Answer to Question 2

A

[sheilaspns]

TYSM

[helenmarkerine]

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