True/False Indicate whether the statement is true or false activity are: investm

Question

True/False Indicate whether the statement is true or false activity are: investment flows, monetary conditions, Factors that affect the level of international economic market confidence. 1. 2. If a country's currency depricates export will decrease and imports will increase. Absolute purchasing-power parity is when the exchange rate equals the ratio of price indexes in two countries. 3. 4. A model that focuses on what is happening at just one point in time is a partial-equilibrium model. 5· The current account and the capital account make up the balance of payments.

Explanation / Answer

1. True- International economic activity is impacted by investment flows, market conditions and market confidence.

2. False- Export wil increase as exporter will get more money on export sale.

3. True- It states that exchange rate between two countries will be equal to price level between 2 countries.

4. False

5. False - It includes financial account as well apart from current and capital account.

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