The Current International Financial System Is a Managed Float Exchange

question 81

Multiple Choice

The current international financial system is a managed float exchange rate system because

• A)exchange rates fluctuate in response to,but are not determined solely by,market forces.
• B)some countries keep their currencies pegged to the dollar,which is not allowed to fluctuate.
• C)all countries allow their exchange rates to fluctuate in response to market forces.
• D)all countries peg their currencies to the dollar which is allowed to fluctuate in response to market forces.

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Definitions:

Pure Monopolists

Firms that are the sole supplier of a unique product with no close substitutes, granting them significant control over pricing.

Barriers To Entry

Obstacles that make it difficult for new competitors to enter a market, which can include high startup costs, regulatory requirements, or established brand loyalty.

Economic Profits

The excess of total revenue over total costs, including both explicit and implicit costs, signifying a return beyond the normal profit level.

Natural Monopoly

A market situation where due to high fixed or startup costs, a single firm can supply a product or service at a lower cost than any potential competitor, leading to a dominance of the market.