In saying that the present system of floating exchange rates is managed, we mean that:
A. countries that allow their exchange rate to move freely will lose their borrowing privileges
with the IMF.
B. the value of any IMF member's currency can only vary 2 percent from its par value.
C. IMF officials determine exchange rates on a day-to-day basis.
D. the central banks of various countries sometimes buy and sell foreign exchange to alter
undesirable trends in exchange rates.
D. the central banks of various countries sometimes buy and sell foreign exchange to alter
undesirable trends in exchange rates.
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We would expect a decrease in taxes to cause a movement down along the short-run Phillips Curve.
Answer the following statement true (T) or false (F)
In comparing actively managed mutual funds with those funds that simply buy and hold a large market portfolio (index funds), we would expect that
A) the actively managed funds provide a higher return than the index funds. B) the index funds provide a higher return after expenses than the actively managed funds. C) actively managed funds and index funds provide the same returns. D) index funds provide a lower return than actively managed funds only if taxes are taken into consideration.
Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. If regulators limited production to 200 bushels, the deadweight loss relative to the option of setting the optimal tax would be would be
a. $0 b. $200 c. $500 d. $1000
The worst remedy for curing the U.S. trade deficit is to
A. increase U.S. personal saving. B. reduce the budget deficit. C. encourage all nations to lower trade barriers. D. limit imports by imposing tariffs, quotas, and other trade restrictions.