Which of the following statements is true of a flexible exchange rate system?
A) Market forces tend to undervalue a currency over time.
B) Market forces tend to overvalue a currency over time.
C) Market forces do not affect exchange rates between different currencies.
D) Market forces tend to push the exchange rate of a currency to market clearing levels over time.
D
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How does an increase in the proportional labor income tax modify the consumer's budget constraint?
A) a parallel move up B) a parallel move down C) the slope decreases (constraint gets steeper) D) the slope increases (constraint gets flatter)
Thomas faces prices of $6 for a unit of good X and $30 for a unit of good Y. At his optimum, Thomas is willing to give up 1 unit of good Y for __________ units of good X
Fill in the blank(s) with correct word
You put money in the bank. The increase in the dollar value of your savings
a. and the change in the number of goods you can buy with your savings are both nominal variables. b. and the change in the number of goods you can buy with your savings are both real variables. c. is a nominal variable, but the change in the number of goods you can buy with your savings is a real variable. d. is a real variable, but the change in the number of goods you buy with your savings is a nominal variable.
Negative externalities lead markets to produce a smaller quantity of a good than is socially desirable, while positive externalities lead markets to produce a larger quantity of a good than is socially desirable.
Answer the following statement(s) true (T) or false (F)