Which of the following problems will most likely occur with a system of flexible exchange rates?
A. Macroeconomic instability as exports and imports fluctuate with the exchange rates.
B. Government favoritism toward selected importers of goods and services.
C. The emergence of black markets for foreign currency.
D. Distortions in trade patterns away from the pattern suggested by comparative advantage.
A. Macroeconomic instability as exports and imports fluctuate with the exchange rates.
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Your willingness to pay more to fly to your vacation spot on the coast rather than incur the cost of driving there indicates that:
a. you place a high value on your time. b. you place a low value on your time. c. you believe time has zero value. d. you believe time is valued at your wage level.
Which of the following is not a tool of the Fed?
A) the discount rate B) reserve requirements C) open market operations D) the proportion of money held as currency
Creditors require collateral in many cases, because
A. the loan is small. B. the borrower is a low risk. C. it helps offset the risks of lending the funds. D. none of these.
For any pair of nations and goods, if each country has an absolute advantage in the production of one product, it is reasonable to expect that specialization and trade will benefit both countries.
Answer the following statement true (T) or false (F)