The strongest argument in favor of fixed exchange rates is
A. that floating exchange rates are often very volatile, disrupting international trade.
B. that a fixed exchange rate allows unrestricted flow of financial capital from and into a country.
C. the country's ability to use independent monetary policy to pursue internal balance.
D. the ease of defending fixed exchange rates during speculative attacks.
Answer: A
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Economic theory is sometimes referred to as marginalism or marginal analysis because
A) it deals with matters not central to most people's personal lives. B) it emphasizes the effects of additional benefits and additional costs. C) it has such a minor effect on political decisions. D) it is only useful when it is added to a large stock of other knowledge. E) it was created by abstracting from experience.
The minimum legal price that can be charged in a market is:
A. full economic price. B. a price floor. C. a price ceiling. D. non-pecuniary price.
The practice of clipping coins by feudal lords was a subtle form of:
A. investment. B. barter. C. specialization. D. taxation.
If population is expanding at the same rate as real output:
A. real per capita output will increase. B. real per capita output will decrease. C. real per capita output will remain unchanged. D. living standards will increase.