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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Countries that are more globalized tend to have
A) a higher likelihood of war or revolution. B) lower levels of foreign direct investment. C) lower levels of real GDP per capita. D) higher growth rates in real GDP per capita.
Two types of costs must be considered when selecting the optimal decision rule. They are _____ and _____
a. decision-making costs; external costs b. marginal costs; variable costs c. decision-making costs; political costs d. political costs; external costs