Proponents of fixed exchange rates, who argue that these rates eliminate uncertainty and therefore promote international trade, sometimes fail to recognize:

A. that international trade is bad for the economy and should not be promoted.
B. that exchange rates do not matter to businesses, so the uncertainty has no impact.
C. that fixed exchange rates are more volatile than flexible exchange rates.
D. that fixed exchange rates may not remain fixed forever.


Answer: D

Economics

You might also like to view...

The relative concept of poverty is based on how far behind average income a particular family gets.

Answer the following statement true (T) or false (F)

Economics

Accounting profits at a firm's break-even point are

A) positive. B) negative. C) zero. D) indeterminate since we need to know what demand is.

Economics

The total cost of federal regulation includes

A. only the funding of the regulatory agencies. B. only the cost of compliance by the regulated firms. C. the funding of government agencies overseeing compliance less the compliance cost for the regulated firms and the opportunity cost of regulation for the firms. D. the funding of government agencies overseeing compliance, the compliance cost for the regulated firms, and the opportunity cost of regulation for the firms.

Economics

Which of these is a drawback of logrolling?

A. All other proposals get support only after yours gets support. B. Your proposal will be supported only after all other proposals get supported. C. Nobody wins in the long run. D. Once you support someone's proposal, they can turn their back on yours.

Economics