Which of the following exchange rate systems is advisable for a country that would like to have greater exchange rate stability but also would like to have the its exchange rate change gradually over time as its prices relative to other countries change?
a. Crawling peg
b. Fixed exchange rates
c. Managed float
d. Fixed rates within bands
.A
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When the price of tortilla chips rose by 10 percent, the quantity of tortilla chips sold fell 4 percent. This indicates that the demand for tortilla chips is
A) inelastic. B) perfectly inelastic. C) elastic. D) unit elastic.
In most years, the foreign financial capital in the United States represented no more than what percentage of the funds used for overall physical investment in the economy?
a. 3% to 5% b. 6% to 10% c. 15% d. 16% to 20%
The dominant Keynesian view of the 1960s and 1970s stressed that
A) changes in government spending and budget deficits can help stabilize an economy. B) the "invisible hand" would be sufficient to lift the economy out of an economic downturn. C) government should avoid budget deficits at all times as they may destabilize the economy. D) both budget deficits and surpluses should be small relative to the size of the overall economy.
The aggregate supply curve is positively sloped because as the price level increases:
A. Profit margins increase in the short run. B. Costs of production decline in the short run. C. The purchasing power of money increases. D. The cost of borrowing declines.