The advantage of a system of fixed exchange rates over one where exchange rates are flexible is that
A. the government gains more control over the economy.
B. floating exchange rates impose risks on importers and exporters from unpredictable exchange rates.
C. exchange controls become unnecessary.
D. fiscal and monetary policy can focus more on domestic conditions.
Answer: B
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All of the following are limitations of direct consumer surveys except:
A) the possibility that consumers' responses may not reflect their actual behavior in the market place. B) the possibility of response biases because survey respondents may not want to reveal their true preferences. C) the likelihood that respondents will deliberately and systematically mislead interviewers. D) the possibility that the type of questions asked may unintentionally bias the respondent's answers.
On which of the following assets are you most likely to earn interest income?
A. Cash and currency B. Checkable deposits C. Money market deposit accounts D. Gold and other precious metals E. All of these responses are correct.
A firm scaled down its operation by reducing all inputs by 50% and experienced a less-than-50% decrease in output. If all input prices remain unchanged, the firm's long-run average cost exhibits:
A. economies of scale at the current output level. B. diseconomies of scale at the current output level. C. a constant long-run average cost at the current output level. D. diminishing marginal returns at the current output level.
The investment demand curve is drawn with the amount of investment on the:
A. Vertical axis and disposable income on the horizontal axis
B. Horizontal axis and disposable income on the vertical axis
C. Horizontal axis and the expected rate of return and interest rate on the vertical axis
D. Vertical axis and the expected rate of return and interest rate on the horizontal axis