The Advantage of a System of Fixed Exchange Rates Over

question 5

Multiple Choice

The advantage of a system of fixed exchange rates over one where exchange rates are flexible is that

• A)the government gains more control over the economy.
• B)floating exchange rates impose risks on importers and exporters from unpredictable exchange rates.
• C)exchange controls become unnecessary.
• D)fiscal and monetary policy can focus more on domestic conditions.

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Definitions:

EV/EBITDA Ratio

A valuation metric comparing a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization, highlighting company profitability.

Geographically

Pertaining to or based upon the natural features, population, industries, etc., of regions or places.

Quick Ratio

A liquidity metric indicating a company’s capacity to meet short-term obligations with its most liquid assets without selling inventory.

Common Size Statements

Financial statements that present all line items as percentages of a common base figure rather than in absolute numbers, facilitating comparison across periods and companies.