Which of the Following Is Not an Advantage to a Country

question 93

Multiple Choice

Which of the following is not an advantage to a country of choosing to fix its exchange rate against a major currency,rather than choosing a floating exchange rate?

• A)Pegging allows the country more flexibility in conducting monetary policy.
• B)Pegging helps avoid inflation in imported goods caused by currency depreciation for countries with significant levels of imports.
• C)Pegging insures that interest payments stemming from foreign loans do not fluctuate with the value of the currency.
• D)Pegging reduces the uncertainty caused by currency fluctuations and thereby simplifies business planning.

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Definitions:

Identical Twins

Twins that develop from a single fertilized egg, sharing the same genetics.

Genetic Factors

Attributes, characteristics, or susceptibilities that are influenced by the genes inherited from one's parents.

Nature and Nurture

A concept that describes the influence of genetic inheritance (nature) and environmental factors (nurture) on the development of traits and behaviors.

Genes

Units of heredity made up of DNA that are responsible for determining the characteristics of an organism.