Which of the Following Is Not a Potential Disadvantage of Freely

question 90

Multiple Choice

Which of the following is not a potential disadvantage of freely floating exchange rates?

• A) They require larger amounts of international reserves than other exchange systems.
• B) Demand for imports and exports may be influenced by price speculation.
• C) There may occur large amounts of destabilizing speculation.
• D) Capital movements among nations may be hindered via exchange rate fluctuations.

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Definitions:

Ideal Standards

Benchmark or optimal performance levels set in managerial accounting to evaluate operational efficiency, without considering any business constraints.

Theoretical Standards

Idealized cost and efficiency targets in manufacturing or production, based on perfect operating conditions.

Standard Cost Variances

The differences between the expected (standard) costs and the actual costs incurred.

Stockholders' Reports

Periodic reports issued by a company to its shareholders, detailing financial performance, operations, and future outlook.