Question

The exchange rate between the U.S. dollar and other currencies is dependent in the short run...

The exchange rate between the U.S. dollar and other currencies is dependent in the short run on all of the following EXCEPT

A.

the desirability of U.S. financial securities.

B.

the law of one price.

C.

the foreign demand for​ U.S.-produced goods.

D.

the level of interest rates in the United States relative to foreign interest rates.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Correct Answer:

B. The law of one price

Explanation:

The law of one price is a phenomenon or theory regarding the one price concept of a good when exchange rates are taken into the consideration. But, this theory is not a factor that affects the exchange rate.

The alternatives A, C and D are the factors or determinants that affect the value of the US dollar and the exchange rate of US dollar against all the major currencies is affected due to these factors.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. When the U.S. dollar depreciates relative to other major currencies, what would happen to exports...
1. When the U.S. dollar depreciates relative to other major currencies, what would happen to exports and imports of goods and services from and to the United States? Is it good for domestic firms exporting goods and services? Is it good for domestic portfolio investors who may purchase foreign assets? 2. When the Federal Reserve conducts an expansionary monetary policy (increasing its monetary base), what would happen to the domestic money supply? Does this also affect the supply of dollar...
If the value of the US dollar increases relative to other currencies (exchange rate increases), what...
If the value of the US dollar increases relative to other currencies (exchange rate increases), what will be the effect on net exports for the United States?
1a. The nominal exchange rate between the United States dollar and the Japanese yen is which...
1a. The nominal exchange rate between the United States dollar and the Japanese yen is which of the following? -The reciprocal of the real exchange rate -The rate at which one of the currencies can be converted into the other currency -Always equal to the real effective exchange rate except when nominal interest rates within the two countries diverge -Always equal to the real effective exchange rate except when real interest rates within the two countries diverge b. If German...
TRUE FALSE. If false CORRECT the wrong word/words An increase in the nominal exchange rate ($...
TRUE FALSE. If false CORRECT the wrong word/words An increase in the nominal exchange rate ($ per Euro) will make the dollar less expensive to foreigners If iD= 10% and iF = 5%, for investors to be indifferent between holding both one year financial assets, they should expect expect that over the next year the domestic currency will appreciate. A trade deficit implies that that country will require a surplus in the financial account compensating that deficit. An increase in...
1. In the long run, the most important determinant of the exchange rate between the US...
1. In the long run, the most important determinant of the exchange rate between the US dollar and the Euro is a. the prices of goods in the US and in Europe. b. economic growth in the United States. c. the flow of financial capital. d. the precautionary motive. e. speculation. 2. An increase in the U.S. demand for the Euro causes a. an increase in the U.S. dollar price of a Euro. b. the Euro to appreciate. c. the...
1. How would the inflation in U.S. affect the price of dollar (the exchange rate between...
1. How would the inflation in U.S. affect the price of dollar (the exchange rate between dollar and other currencies)?
If on Tuesday you can buy 125 yen per U.S. dollar and on Wednesday you can...
If on Tuesday you can buy 125 yen per U.S. dollar and on Wednesday you can buy 120 yen per U.S. dollar, a. both the U.S. dollar and the yen have appreciated. b. both the U.S. dollar and the yen have depreciated. c. the U.S. dollar has appreciated and the yen has depreciated. d. the U.S. dollar has depreciated and the yen has appreciated. If the U.S. dollar appreciates in the foreign exchange market, a. American goods will become more...
4.Suppose that the exchange rate between the euro and US dollar is 0.92 euro/dollar. The price...
4.Suppose that the exchange rate between the euro and US dollar is 0.92 euro/dollar. The price index in the United States is 112 and the price index in Europe is 205. What is the real exchange rate between euros and dollars? Question 4 options: 0.50 1.83 1.68 0.55 0.92 5.Suppose that the exchange rate between the euro and US dollar is 0.92 euro/dollar. What is the exchange rate expressed in dollars/euro? Options: 0.92 0.73 1.02 1.80 1.09 Question 6 (1...
If there is an increase in the U.S. demand for European goods, then the dollar will...
If there is an increase in the U.S. demand for European goods, then the dollar will appreciate against the euro. the dollar will depreciate against the euro. the exchange rate between the dollar and the euro will remain unchanged, but their exchange rates will appreciate against other currencies. both the dollar and the euro will appreciate. both the dollar and the euro will depreciate.
Suppose, in the preceding year, the U.S. dollar strengthens against other currencies. Explain its effect on...
Suppose, in the preceding year, the U.S. dollar strengthens against other currencies. Explain its effect on U.S. dollar revenues and expenses for a global firm headquartered in the United States. Please don't hand write. Thank you.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT