A common argument for fixed exchange rates is that they
A) give central banks greater freedom in adjusting their economy's level of output.
B) forever free the central bank from have to adjust the exchange rate to fundamental changes in the economy.
C) make trade more costly, and thus encourage domestic citizens to buy domestically produced output.
D) all of the above
E) none of the above
E
You might also like to view...
Explain the time dimension as it relates to elasticity. Be sure to include in your answer the difference in elasticity between the short run and the long run
What will be an ideal response?
A. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 5%?
b. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 8%? c. If a stock is expected to pay an annual dividend of $20 this year, what is the approximate present value of the stock, given that the discount rate is 8% and dividends are expected to grow at a rate of 2% per year?
Gross domestic product (GDP) equals the ________ of final ________ produced within a country during a given period of time.
A. market value; goods B. market value; goods and services C. quantity; goods and services D. market value; services
Suppose the public holds $200 billion in M2 and the velocity of the M2 money supply is 5. What is the value of nominal GDP?
A) $500. B) $1,000. C) $1,500. D) That information cannot be determined.