Proponents of fixed exchange rates, who argue that these rates eliminate uncertainty and therefore promote international trade, sometimes fail to recognize that:
A. exchange rates do not matter to businesses, so the uncertainty has no impact.
B. fixed exchange rates are more volatile than flexible exchange rates.
C. fixed exchange rates may not remain fixed forever.
D. international trade is bad for the economy and should not be promoted.
Answer: C
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A firm in monopolistic competition that is maximizing profit ________
A. always makes a positive economic profit in the short run B. never needs to shut down because its price always exceeds minimum average variable cost C. might, in the short run, sell at a price that is less than average total cost D. shuts down temporarily if it incurs a loss equal to total variable cost
Suppose that homemakers are included as employed in the labor force statistics, rather than being counted as out of the labor force. This would
A) increase the measured unemployment rate. B) increase the measured labor force participation rate. C) decrease the number of persons in the labor force. D) decrease the number of persons in the working-age population.