Advocates of Floating Rate Suggested It Is Favorable for Economies

question 10

Multiple Choice

Advocates of floating rate suggested it is favorable for economies for all of the following reasons EXCEPT

• A) it discourages attack from foreign exchange speculators because of the fact that exchange rate adjustment is immediate.
• B) it helps stabilize the shock effect on unemployment in case of economic changes such as a fall in export demand.
• C) it automatically matches the domestic inflation with ongoing foreign inflation.
• D) it gives every country the opportunity to guide its own monetary conditions at home.
• E) it brings the LR exchange rate to the level predicted by PPP without government policy decisions.

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Definitions:

Culture

The set of shared attitudes, values, goals, and practices that characterizes an institution, organization, or group.

Cultural Competency

The ability to understand, appreciate, and interact effectively with people from cultures or belief systems different from one's own.

Cultural Dexterity

The ability to understand, respect, and navigate different cultural contexts and practices effectively.

Cultural Insight

An understanding of the values, practices, and social norms of a particular group or society, gained through observation, study, or experience.