Question
When the law of one price holds, this practice is impossible. For 10 points each:
[10m] Name this practice in which an agent buys an asset in one market to sell it for a risk-free in another market.
ANSWER: arbitrage
[10e] In part to discourage arbitrage in the "carry trade," James Tobin proposed a small tax on these quantities for trade between two currencies such that investors could not exploit countries' varying interest rates.
ANSWER: foreign exchange rates [or forex rates; or FX rates]
[10h] Tobin and this economist name an effect regarding the lag between inflation and interest rates. Fixed exchange rates can't exist alongside free capital movement and independent monetary policy per a model named for Marcus Fleming and this Canadian, dubbed the "father of the euro."
ANSWER: Robert Mundell [or Mundell-Tobin effect; or Mundell-Fleming model]
<Clark Smith , Social Science - Economics>
Summary
| 2023 NASAT | 06/17/2023 | Y | 9 | 13.33 | 78% | 44% | 11% |
Data
| Arkansas | Asia B | 0 | 0 | 0 | 0 |
| Illinois Blue | California | 0 | 10 | 0 | 10 |
| Asia A | Illinois White | 10 | 10 | 10 | 30 |
| Ohio | Kentucky A | 10 | 0 | 0 | 10 |
| Maryland Gold | New Jersey B | 10 | 10 | 0 | 20 |
| Maryland Red | Missouri A | 0 | 10 | 0 | 10 |
| Missouri B | Virginia | 0 | 10 | 0 | 10 |
| Illinois Orange | New Jersey A | 10 | 10 | 0 | 20 |
| Kentucky B | Pennyslvania | 0 | 10 | 0 | 10 |