Identify the Correct Statement

question 31

Multiple Choice

Identify the correct statement.

• A)International capital-flow shocks are likely to be less disruptive under fixed exchange-rates.
• B)If a country is likely to be buffeted mainly by internal shocks, the country should choose a fixed exchange-rate.
• C)The effects of shocks under floating exchange-rates depend on whether interventions are sterilized.
• D)International trade shocks can be countered by adopting a fixed exchange rate that helps to improve price competitiveness of the country's products.

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Definitions:

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and others and to understand that others have beliefs and desires different from one's own.

Centration

A term from cognitive development theory describing a focus on one aspect of a situation while ignoring others, common in early childhood.

Vocabulary Explosion

Vocabulary explosion refers to the rapid increase in the number of words a child learns and uses, typically occurring between the ages of two and three.

Lateralization

The tendency for some neural functions or cognitive processes to be specialized to one side of the brain or the other.