Author Question: Which of the following statements is the MOST accurate about the Law of One Price on Scandinavian ... (Read 14 times)

Caiter2013 · **on:** Jun 30, 2018

Which of the following statements is the MOST accurate about the Law of One Price on Scandinavian ferry lines?

A) Due to menu costs, the Law of One Price does not hold.
B) To avoid arbitrage opportunities, the Law of One Price must hold.
C) Transaction costs of exchanging currency causes the Law of One Price to fail.
D) Transportation costs between ferry lines leads to a violation of the Law of One Price.
E) The physical distance allowed the Law of One Price to hold.

Question 2

The Smithsonian Agreement of 1971 was hailed by President Nixon as a fundamental reorganization of the international monetary system. In fact, what it accomplished was

A) the revaluation of the dollar.
B) the devaluation of the dollar.
C) the reduction of the gold content of the dollar.
D) the elimination of gold backing for the dollar.
E) Both B and C.