Which One of the Following Is NOT an Alleged Disadvantage

question 18

Multiple Choice

Which one of the following is NOT an alleged disadvantage of a flexible exchange rate system?

• A) possibility of destabilizing speculation
• B) wasteful resource movements between industries
• C) increased need for international reserves
• D) danger of a "vicious circle" between inflation in a country and depreciation of that Country's currency

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Definitions:

Minimum Wage

The lowest legal wage that can be paid to workers, determined by government regulation.

Market Equilibrium Wage

The wage rate at which the quantity of labor supplied equals the quantity of labor demanded in a given labor market.

Widget Industry

A fictional or generic term often used to represent any sector of manufacturing, without specifying a particular type of product.

Nonunionized Labor Market

A labor market that is composed of workers and employers where no labor unions are present to represent the workers' interests.