A) Exchange rates should move to equalize the price levels of identical good:across country B) Interest rates should be the same atio (C) Currency values should adjust hased on inflabondifferentials alone. D) There should be no price differences between domestic and international markets 99. What does the term "capital mobility" refer to in international economics? A) The ability of capital to flow freely scross bodiers without restrictions. B) The movement of people across national border.for employment opportunities. C) The movement of goods and services between countries. D) The ability of governments to impose capital controls to limit foreign investments. 100. Which of the following is a characteristic of a currency peg system? A) A country's currency value is determined b)market forces. B) The government sets in upper and lower limit for exchange rates. C) The value of the domestic currency is fixed to mother currency or a basket of currencies no control over its monetary policy

99. The correct answer is A) The ability of capital to flow freely across borders without restrictions.<br /><br />Capital mobility refers to the ability of capital to move freely across borders without any restrictions. It allows for the free flow of capital between countries, enabling investors to invest in foreign markets and businesses to access global capital markets. This facilitates economic growth and international trade.<br /><br />100. The correct answer is C) The value of the domestic currency is fixed to another currency or a basket of currencies.<br /><br />A currency peg system is a type of exchange rate regime where a country's currency value is fixed to another currency or a basket of currencies. This means that the exchange rate between the two currencies remains stable, providing a predictable and stable environment for international trade and investment. In a currency peg system, the government or central bank maintains the fixed exchange rate by intervening in the foreign exchange market and holding reserves of the foreign currency to which the domestic currency is pegged.