Advocates of Flexible Exchange Rates Claim That Under Flexible Exchange

question 115

Multiple Choice

Advocates of flexible exchange rates claim that under flexible exchange rates

• A) enhanced control over fiscal policy would allow countries to dismantle their distorting barriers to international payments.
• B) reduced control over monetary policy would allow countries to dismantle their distorting barriers to international payments.
• C) enhanced control over monetary policy would allow countries to increase their distorting barriers to international payments.
• D) enhanced control over monetary policy would allow countries to dismantle their distorting barriers to international payments.
• E) enhanced control over monetary policy would destabilize exchange rates.

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Definitions:

Labor Rate Variance

The difference between the actual hourly wage paid to workers and the standard or expected wage rate, multiplied by the total hours worked.

Standard Amount

A benchmark or norm set for the quantity or cost of inputs in producing a specific product or in carrying out a process.

Actual Output

The real, quantifiable production achieved within a given time period, often compared against planned or potential output.

Labor Efficiency Variance

The difference between the actual labor hours worked and the expected labor hours, multiplied by the standard labor rate, indicating efficiency in labor use.