The Desire of Governments to Be Able to Use Both

question 92

Multiple Choice

The desire of governments to be able to use both monetary and fiscal policies to pursue domestic goals of stable prices and full employment has been a reason that:

• A)fixed exchange rates have been replaced with flexible exchange rates.
• B)flexible exchange rates have been replaced with fixed exchange rates.
• C)countries have tried to stabilize their exchange rates at a high level.
• D)countries have tried to stabilize their exchange rates at a low level.

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Definitions:

Expected Value

A calculated average of all possible values for a random variable, weighted by their probabilities of occurrence.

Health Costs

Expenses associated with maintaining, improving, or treating an individual’s health, including medical care, medication, and hospitalization.

Moral Hazard

Moral hazard occurs when one party in an agreement can take risks because the negative consequences of their actions will be borne by another party.

Expected Value

The anticipated value of a variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence.