Proponents of Fixed Exchange Rates Would Find the Most Support

question 19

Multiple Choice

Proponents of fixed exchange rates would find the most support for their position in which one of the following empirical results regarding the relationship between
Exchange rate variations and the volume of international trade? (Assume that the empirical tests adequately account for other factors that influence the volume of trade.)

• A) no discernible relationship between exchange rate variations and the volume of trade
• B) a negative relationship between exchange rate variations and the volume of trade
• C) a mildly positive relationship between exchange rate variations and the volume of Trade
• D) a strongly positive relationship between exchange rate variations and the volume of Trade

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Definitions:

Simple Events

In probability, a simple event is a single outcome within a sample space, not composed of other events.

Probability

A measure of the likelihood that an event will occur, ranging from 0 (impossibility) to 1 (certainty).

Combinations

The selection of items from a collection such that the order of selection does not matter.

Class

In the context of data, a grouping or categorization according to shared characteristics; in education, an organized period of instruction.