Foreıgn Trade Deneme Sınavı Sorusu #1407103
Which of the following is not one of the factors that cause a change in the equilibrium exchange rate?
The real GDP |
Relative productivity |
Relative price level |
Barriers for international trade (like tariffs and quotas) |
Purchasing power parity |
Factors that cause a change in the equilibrium exchange rate are the factors which are accepted as constant other than the current exchange rate. In macroeconomics, these factors include the real GDP, relative productivity, relative price level, barriers for international trade (like tariffs and quotas) and preferences between imported and domestically produced goods. However, the theory, known as purchasing power parity, however, claims that the foreign exchange rate will solely be determined by the price level changes in both countries.
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