Under a flexible exchange rate system, there is no need for foreign exchange reserves.
Answer the following statement true (T) or false (F)
True
There is no need to use foreign exchange reserves to maintain the exchange rate because the market is performing this function.
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Mechanisms that manufacturers can use to deal with misaligned retailer incentives include
a. setting a maximum retail price b. allowing many retailers to sell the product in each market c. preventing retailers from compensating sales staff for demonstrating the product d. providing manufacturer staff to demonstrate the product in stores
Explain how short-run and long-run equilibrium in monopolistic competition differ. Use graphs to illustrate your answer. Be sure that your graphs are completely and correctly labeled.
What will be an ideal response?
If the economy is currently in a recessionary gap, the SRAS curve intersects the AD curve to the left of Natural Real GDP
Indicate whether the statement is true or false
When a monopolist increases output, total revenue will:
A. decrease if the quantity effect outweighs the price effect. B. increase if the price effect outweighs the quantity effect. C. increase but it will have no price effect. D. increase if the quantity effect outweighs the price effect.