When exchange rates are flexible, they are
A. Determined by the relative levels of gold reserves.
B. Permitted to vary with changes in supply and demand in the foreign exchange market.
C. Determined by the provisions of the Bretton Woods agreement.
D. Determined by proclamation of the monetary authorities of a country.
Answer: B
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Suppose a country has no trade with other countries and people can borrow as many funds as they want at the current interest rate. An increase in the price level will generate
A) a decrease in total planned real expenditures because of the real-balance effect. B) a decrease in total planned real expenditures because the indirect effect will be stronger than the real-balance effect. C) a decrease in total planned real expenditures because the real-balance effect will be stronger than the indirect effect and the open-economy effect. D) a decrease in total planned real expenditures because of the open-economy effect and the indirect effect.
The following types of statistical inference are used throughout econometrics, with the exception of
A) confidence intervals. B) hypothesis testing. C) calibration. D) estimation.
Sole proprietorships are permitted to operate in only one country
Indicate whether the statement is true or false
Most economists believe that the poor economic performance of countries located in tropical areas is primarily the result of
What will be an ideal response?