Proponents of Freely Floating Exchange Rates Maintain That

question 30

Multiple Choice

Proponents of freely floating exchange rates maintain that

• A) central banks can easily modify fluctuations in exchange rates.
• B) the system allows policy makers freedom in pursuing domestic economic goals.
• C) inelastic demand schedules prevent large fluctuations in exchange rates.
• D) inelastic supply schedules prevent large fluctuations in exchange rates.

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Definitions:

Gross Margin Percentage

The proportion of sales revenue remaining after deducting cost of goods sold, expressed as a percentage of sales revenue.

Net Operating Income

Income before interest and income taxes have been deducted.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including labor and materials.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity of the business.