Which of the Following Statements Is True

question 7

Multiple Choice

Which of the following statements is true?

• A)A domestic monetary shock is less disruptive with floating exchange-rates.
• B)If foreign capital is highly responsive to changes in interest rates, then domestic spending shocks are less disruptive with fixed exchange-rates.
• C)With floating exchange-rates the transmission of business cycles through foreign trade and repercussion is less than with fixed exchange-rates.
• D)International capital-flow shocks have domestic effects under fixed exchange-rates but not under floating exchange-rates.

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Definitions:

Price Matching

A policy by which a retailer promises to match a competitor’s lower price on an identical item to attract or retain customers.

Human Brain

The human brain is the organ located in the head of humans that controls thought, memory, emotion, touch, motor skills, vision, breathing, temperature, hunger, and every process that regulates our body.

Behavioral Economists

Professionals who study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.

Prone To Errors

Characterized by a higher likelihood or tendency to make mistakes or inaccuracies.