All of the Following Are True Regarding Flexible Exchange Rates

question 41

Multiple Choice

All of the following are true regarding flexible exchange rates except

• A)Speculators typically push exchange rates away from the long-term equilibrium.
• B)The quantity of foreign exchange demanded equals the quantity supplied.
• C)Exchange rate movements alter relative prices and may disrupt import and export flows.
• D)Some people are hurt while others are helped by exchange rate movements.

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Definitions:

Normal Distribution

A probability distribution that is symmetric about the mean, depicting that data near the mean are more frequent in occurrence than data far from the mean.

Binomial Distribution

A probability distribution that models the number of successes in a fixed number of independent Bernoulli trials with the same probability of success.

F-distribution

A probability distribution that arises in the analysis of variance and is used to calculate whether two observed variances are significantly different.

Matched Pairs

A study design where subjects are paired based on certain criteria, ensuring that each pair is similar except for the treatment given.