In comparison with a floating exchange rate, the effect on the volume of trade in a fixed exchange rate is:
A) highest under an indirect peg.
B) lowest for currency unions.
C) highest for currency unions.
D) higher for an indirect peg than a direct peg.
Ans: C) highest for currency unions.
You might also like to view...
Ellen's Painting Services is a perfectly competitive firm that currently paints 10 houses a month and charges $100 per house, which is the going market price
Ellen's marginal cost is positively related with the quantity of service she provides and is currently $120. What should Ellen do to increase her economic profit? Paint more houses? Raise her price? Explain your answer.
If the level of output produced by the firms in a perfectly competitive market has no effect on the prices of the inputs used by the firms, the market supply curve will be flatter than the supply curve for an individual firm in the market
Indicate whether the statement is true or false