Identify the correct statement.
A. If a country is likely to be buffeted mainly by internal shocks, the country should choose a fixed exchange rate.
B. The effects of shocks under floating exchange rates depend on whether interventions are sterilized.
C. International trade shocks can be countered by adopting a fixed exchange rate that helps to improve the price competitiveness of the country's products.
D. International capital-flow shocks are likely to be less disruptive under fixed exchange rates.
Answer: A
You might also like to view...
Suppose that demand for tablets increases, and simultaneously, the supply of tablets increases. Which of the following would you conclude definitely will occur in the market for tablets?
A) The market clearing price will rise. B) The market clearing price will fall. C) The equilibrium quantity will rise. D) The equilibrium quantity will fall.
The difference between a firm's profit-maximizing quantity and the quantity that minimizes average cost is called:
a. economic profit. b. excess capacity. c. economic rent. d. excess supply.
Which statement is true?
A. The perfect competitor has some control over price. B. The perfect competitor produces at peak efficiency in the long run. C. The perfect competitor makes a profit in the long run. D. None of the statements are true.
An advantage of the household survey over the establishment survey of the labor market is that the household survey
A) is based on actual payrolls, rather than on unverified answers. B) includes the number of self-employed persons. C) includes the number of discouraged workers. D) omits persons employed at newly opened firms.