Exchange Rate Controls

question 33

Multiple Choice

Exchange rate controls

• A) achieved prominence during the economic crises of the late 1930s.
• B) were popular immediately after World War II.
• C) are widely used by the developing nations.
• D) All of these are correct.

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Definitions:

Constant Costs

Costs that remain unchanged regardless of the level of production or activity.

Long-Run Equilibrium

A state in which all firms in a market are making zero economic profit, with no firm having an incentive to enter or exit the industry.

Allocative Efficiency

An economic state where resources are allocated in a way that maximizes the overall utility to society, ensuring that the goods and services produced match consumer preferences.

Minimization

The process or strategy of reducing or keeping to a minimum the size, amount, or degree of something, especially costs or liabilities.