One disadvantage of a floating exchange rate system compared to a fixed or managed float exchange rate system is
A) it does not allow the exchange rate to reflect demand and supply in the market.
B) it is difficult to maintain.
C) it can worsen inflation if domestic prices of imports rise quickly.
D) it eliminates the possibility of depreciation during a recession.
C
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All else equal, increases in proprietors' income will ________.
A. increase wages B. increase exports C. increase profits and losses D. increase gross investment
The marginal product of labor is defined as
A) the change in output that a firm produces as a result of hiring one more worker. B) the additional labor cost of producing one more unit of output. C) the change in total revenue that results when an additional unit of a labor is hired. D) the additional labor required to produce one more unit of output.
Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below. Acme Manufacturing: TC = 100 + 3Q. Generic Industries: TC = 500 + 3Q. Suppose that Acme and Generic face the same demand curve. If each firm produces its profit-maximizing level of output and earns a positive economic profit, then which of the following statements is true?
A. Generic will produce more output than Acme. B. Acme and Generic will produce the same quantity, but Acme will have higher profits. C. Acme and Generic will produce the same quantity and will have the same profits. D. Acme will produce more output than Generic.
When government expenditures are greater than tax revenues
A) there will be budget surplus. B) the public debt will be reduced. C) there will be budget deficit. D) automatic stabilizers do not kick in.