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:

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account, recorded on the left-hand side.

Utilities Expense

Utilities Expense refers to the cost incurred from the consumption of utilities services like electricity, water, and gas in the course of business operations.

Post-Closing Trial Balance

A list of all accounts and their balances after closing entries are made, verifying the equality of debits and credits.

Balance Sheet

A financial statement that displays the assets, liabilities, and shareholders' equity of a company at a specific point in time, showing the balance of income and expenditure over the preceding period.