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Question
Which of the following is true of the differences in relative demand and supply of currencies?A.They cannot be used to explain the determination of exchange rates.
B.While they provide an understanding of the major factors underlying exchange rates, they exclude minor factors.
C.They provide a high-level understanding of exchange rates.
D.While they provide an accurate explanation for appreciation of currencies, they fail to explain depreciation.
E.They cannot explain or predict when the demand of a particular currency would exceed its supply and vice versa.
Answer
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