Proponents of the Fixed Exchange Rate System Argue That

question 55

Multiple Choice

Proponents of the fixed exchange rate system argue that

• A) flexible exchange rates may promote international trade,but under a fixed exchange rate system at least we know what the rates will be from day to day.
• B) under a flexible exchange rate system,there is too great a chance that the exchange rate will diverge from the equilibrium exchange rate.
• C) under a flexible exchange rate system,there is no way of knowing what the exchange rate is at any particular point in time.
• D) under a fixed exchange rate system,there would be only one currency.
• E) none of the above

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Definitions:

Caffeine

A stimulant found in various plants, commonly used to improve mental alertness and often found in coffee, tea, and soft drinks.

General Motors

An American multinational corporation specializing in automotive design, manufacturing, marketing, and distribution.

Louis Chevrolet

A Swiss-American race car driver and the co-founder of the Chevrolet Motor Car Company, a major automotive brand.

Car-Racing Star

A highly skilled and popular athlete in the sport of car racing, often celebrated for their achievements and victories.