Economic Experience Since 1973 Indicates That, Under Floating Exchange Rates

question 110

Multiple Choice

Economic experience since 1973 indicates that, under floating exchange rates

• A) large and persistent departures from external balance were not prevented.
• B) large and persistent departures from external balance were prevented.
• C) changes in exchange rates failed to act as automatic stabilizers.
• D) reduced monetary policy autonomy.
• E) monetary policy autonomy was protected.

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Definitions:

Nonstage Theory

A theory suggesting that development or cognition does not progress through fixed stages, but rather continuously.

Heuristics

Simple, efficient rules, learned or hard-wired by evolutionary processes, that help in making decisions, forming judgments, or solving problems.

Structural

Pertaining to the physical or logical arrangement of a system's parts.

Preoperational Stage

The second stage in Piaget's theory of cognitive development, typically occurring between ages 2 and 7, characterized by the development of language and the ability to think symbolically, yet struggling with logic or understanding the viewpoint of others.