What Is the Main Argument of the Proponents of a Fixed

question 81

Multiple Choice

What is the main argument of the proponents of a fixed exchange rate system for Canada?

• A)There is less uncertainty for importers,exporters and investors,and as a result there would be more trade,and the resulting gains from trade.
• B)The fixed exchange rate would act as a shock absorber and reduce the swings in output and employment.
• C)Canada's exports would be more attractive to the rest of the world,which would lead to a larger current account surplus.
• D)Investment in Canada would be more attractive to the rest of the world,which would lead to a larger capital account surplus.
• E)Canada is traditionally an exporting nation,and a fixed exchange rate is more advantageous for exporters.

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Definitions:

Direct Materials

Raw materials that can be directly traced to the production of goods, forming a significant part of manufacturing costs.

Net Cash Inflows

The total amount of money received from operations, investments, and financing activities, minus the amount of money spent.

Operating Income

The profit realized from a company's everyday core business operations, excluding deductions of interest and taxes.

Cash Payback Period

The duration needed for an investment to generate cash flows sufficient to recover the initial cost of the investment.