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Please help me complete this finance review packet. I am using this to study so please dont misinform 20) The Law of One Price: A)
Please help me complete this finance review packet. I am using this to study so please dont misinform
20) The Law of One Price: A) Relies on trade barriers. B) Assumes shipping channels are expensive. C) States the price of an identical good will be the same throughout the world. D) Carries heavy fines. 21) All of these factors determine long run Exchange Rates except: A) A country's form of government B) Productivity Levels C) Tariffs and Quotas D) Consumer Preferences E) Relative Price Levels 22) US Banks pays 3% interest for a l year deposit. European Banks pay 5% nterest over the same period. The spot F/X Rate is 1.02 Euro/USD. What is the expected Exchange rate in I year? A) 0.96 Euro/USD B) 1.04 Euro/USD C) 1.00 Euro/USD D) It cannot be determined 23) If the Fed sells $1 billion worth of Euro to buy USD: A) International Reserves fall by S1 billion B) USD Currency in Circulation falls by $1 billion C) Expected Return and Demand for the USD rises D) The USD appreciates E) All of the above F) None of the above 24) Ifa Central Bank prints its currency and exchange it for foreign currency, its domestic monetary base and its International Reserves A) Decrease, decrease B) Decrease, increase C) Increase, increase D) Increase, decrease Step by Step Solution
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