Multiple Choice
Which of the following statements is correct?
A) In the short run, interest rate differentials have the greatest impact on exchange rates.
B) In the medium run, differences in growth rates of aggregate demand have the greatest impact on exchange rates.
C) In the long run, price and inflation differentials have the greatest impact on exchange rates.
D) All of the above are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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