Which of the following statements is are true a The lower a

Which of the following statements is (are) true? a) The lower a country\'s income, the lower are the prices of food and basic services. b) Not all goods consumed in a country are traded internationally. c) The supply and demand for foreign currency involves more than the trading of foreign currency for the sake of merchandise trade. d) All of these are correct.

Solution

All the statements are correct. The answer is \"D\".

Lower income country has lower price level for goods and services. For example, A cost of living in the country like India will be much lower than the US.

Not all consumable goods are traded. For example, goods that at easily available and hard to transport are not traded worldwide. (building material like concrete)

Foreign currency is traded for arbitrage, hedging etc all these doesn\'t involve merchandise.