Foreign exchange market intervention is most effective when:
a. each country's political leaders agree to cooperate fully with the process.
b. leading economists in each country believe that intervention is needed.
c. permanent differences between the free market exchange rate and the fixed exchange rate are expected.
d. temporary differences between the free market exchange rate and the fixed exchange rate are expected.
e. all the countries restrict the international movement of goods and services.
d
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The reason that the coffeehouse market is monopolistically competitive rather than perfectly competitive is because:
"A shortage in the loanable funds market occurs when the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded." Explain why this statement is correct or incorrect
What will be an ideal response?
Government actions to compel more competition in an industry
A) always entail costs, which must be compared to any gains created by the policy. B) always have the effect of lowering prices to consumers. C) cannot benefit anyone if they result in greater inefficiency. D) will result in lower prices but cannot bring about a larger output. E) will not succeed because competition, like morality, cannot be legislated.
Which of the following is a leakage?
A. Government spending. B. Investment. C. Aggregate demand. D. Imports.