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  • According to the theory of comparative advantage, countries gain from trade because #231
  • In most countries, foreign trade represents a significant share of … #232
  • The International Fisher equation states that... #233
  • To understand the current nominal exchange rate, we need to know all of the following except... #234
  • Suppose the following bilateral spot exchange rates are being quoted for the Danish krone (DKK), the US dollar (US$) and the euro (€):   US$/€ = 1.5 DKK/€ = 7.0 DKK/$ = 5.0   If you start with 100€, the most you could end up with in a single round of triangular arbitrage would be... #235
  • (A) … interest rate parity involves (B) … domestic and foreign interest rates and the spot and the (C) … exchange rates. #236
  • Over the long run the rate of depreciation of the nominal exchange rate between two countries is approximately equal to the difference in national … rates. #237
  • Which of the following is not a special feature of the foreign exchange rate market? #238
  • Which statement about the uncovered parity condition is true? #239
  • Long-term exchange rate fluctuations tend to be (A) … than daily changes in absolute terms, but there are (B) … changes which are (C) … reversed. #240
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