Which of the Following Statements Is Correct with Respect to Flexible

question 12

Multiple Choice

Which of the following statements is correct with respect to flexible exchange rates?

• A)they insulate the domestic economy from external shocks much more than fixed exchange rates
• B)they are particularly attractive to nations subject to large external shocks
• C)they provide less stability to an open economy subject to large internal shocks
• D)all of the above

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Definitions:

Foreign Policy

A government's strategy in managing its relationships and dealings with other nations to achieve national objectives.

Communist Influence

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A period or situation where established moral values or ethical standards are questioned, leading to widespread societal concern or conflict.