A System of Managed Floating Exchange Rates Is

question 39

Multiple Choice

A system of managed floating exchange rates is

• A) a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed.
• B) a system in which governments use flexible exchange rates.
• C) a system in which governments are forbidden from attempts to moderate exchange rate movements without keeping exchange rates rigidly fixed.
• D) a system in which governments need to reach a prior agreement among them before they may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed.
• E) a system in which governments use extensive fiscal policy to discourage exchange rate movements.

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Definitions:

Profitable

A term used to describe a business or activity that generates more revenue than the expenses incurred in operating.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the cost per unit of output decreases with increasing scale.

Specialization of Labor

The division of labor where individuals focus on a limited scope of tasks or skills, leading to increased efficiency and productivity.

Average Fixed Costs

The fixed costs of production (costs that do not vary with the level of output) divided by the quantity of output produced.