The Term "Flexible Exchange Rates" Refers to

question 169

Multiple Choice

The term "flexible exchange rates" refers to

• A) a situation in which exchange rates are allowed to fluctuate in the open market in response to changes in supply and demand.
• B) the increase in the exchange value of one nation's currency in terms of an other nation.
• C) a nation in which households, firms, and governments buy and sell national currencies.
• D) the decrease in the exchange value of one nation's currency in terms of another nation.

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Definitions:

Selection Bias

A problem in experimental design stemming from the experimental groups not being comparable.

Spurious Relationships

A connection between two variables that appears causal but is actually caused by a third variable.

Experimental Situation

The setting experimental subjects are placed in. This setting may be a threat to external validity if it does not reflect external reality.

External Validity

Relates to whether an experiment has in fact captured the external world that the researcher is investigating.