One of the advantages of floating exchange rates is that:
a. consumers always know how much imported goods cost.
b. businesses always know, in advance, what future exchange rates will be.
c. countries are free to pursue their own macroeconomic policies without maintaining exchange rates.
d. countries cannot act independently and must thus coordinate their macroeconomic policies.
e. the global interest rate tends to decline to the lowest possible level.
c
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Players in all of the following games have no dominant strategy except in
A) a prisoner's dilemma game. B) a pure coordination game. C) an assurance game. D) a battle of the sexes game.
The reason Airbus succeeded in the Brander Spencer example is that
A) Boeing made the first move in this strategic game. B) Europeans tend to be better strategists than corn-fed Americans. C) the Airbus actually was a better plane than the Boeing 747. D) U.S. laws actually prohibit U.S. exporters from bribing foreign officials. E) the subsidy removed the advantage that Boeing gained with their head start in production.