In the long run, ________ dominate exchange rate movements. A) ...

[swpotter12]

In the long run, ________ dominate exchange rate movements.
 
  A) short-run inflation differentials
  B) long-run inflation differentials
  C) short-run relative price changes
  D) All of the above

Question 2

A country will be able to consume a combination of goods that is not attainable solely from domestic production if
 
  A) the world terms of trade differ from its domestic relative costs.
  B) the country specializes in one product.
  C) the country avoids international trade.
  D) the world terms of trade equal the domestic relative costs.
  E) the country's domestic production value equals world relative value.

[jxjsniuniu]

Answer to Question 1

B

Answer to Question 2

A