Flexible exchange rates exist when
A. exchange rates are determined by forces of supply and demand.
B. speculators bet that a currency will soon be depreciated.
C. governments and central banks spend foreign reserves to prop up an exchange rate at a certain level.
D. no one knows what the true value of a currency is.
Answer: A
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The social costs of an activity are greater than the private costs of the activity when
A) a person does not pay all costs associated with a particular resource-using activity. B) the internal costs of the resource-using activity are less than the external costs of the activity. C) the internal costs of the resource-using activity are positive. D) the external costs of the resource-using activity are zero.
The Securities and Exchange Commission is
A. responsible for regulating U.S. commercial banks. B. responsible for enforcing antitrust law. C. responsible for monitoring the activities of U.S. stock markets. D. responsible for monitoring currency exchanges.
A bank would be considered insolvent when the value of its liabilities exceed its
a. assets. b. required reserves. c. actual reserves. d. net worth.
The U.S. Constitution prevents tariffs on trade between the individual states.
Answer the following statement true (T) or false (F)