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.
b
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In the single-polluter case, suppose a firm faces an emission charge implemented as a marginal tax (MT) of 12 and that its MAC = 0.8A. Based on this information, the firm
a. is better off paying the tax at abatement levels below 15 units b. should abate pollution for all abatement levels up to 15 units c. is better off paying the tax as long as the abatement level is 1.5 units or less d. none of the above
During the 20th century, the highest savings rates in the U.S. were observed during
A) the Great Depression. B) World War II. C) the late 1980s and 1990s. D) none of the above.
According to the aggregate supply drawn under the monetarist view, which of the following would lead to a higher price level?
A. The purchase of bonds in the open market by the Fed. B. An increase in the discount rate. C. An increase in the reserve requirement. D. A decrease in the money multiplier.
U.S. and Japanese automakers __________ during the automobile VER of the 1980s.
a. both suffered losses b. were locked in a contentious trade war c. both enjoyed higher prices and higher profits d. both felt that the other side had more gains