Over short periods, the ________ has a much greater role in exchange rate determination than does...
Over short periods, the ________ has a much greater role in exchange rate determination than does ________.
| A. |
the liquidity of foreign assets; the price of foreign assets |
|
| B. |
the demand for exports and imports; decision to hold domestic or foreign assets |
|
| C. |
the price of foreign assets; the liquidity of foreign assets |
|
| D. |
decision to hold domestic or foreign assets; the demand for exports and imports |
Homework Answers
Answer
Option D
a decision to hold domestic or foreign assets; the demand for exports and imports
In short run, the holding assets have more impact on the exchange than the import or export because the holding assets changes in a very short time compared to import and exports takes time to effect on the exchange rates.
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