One Reason a Country Would Be Better Off Fixing Its

question 27

Multiple Choice

One reason a country would be better off fixing its exchange rate is if:

• A) it has a strong reputation for controlling inflation on its own.
• B) it lacks ample foreign exchange reserves.
• C) it is well-integrated with the economy of the country to whose currency its currency is fixed.
• D) its own macroeconomic characteristics are inversely correlated with the macroeconomic characteristics of the country to whose currency its currency is fixed.

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Definitions:

Compound

A material composed of atoms from at least two distinct elements that are chemically combined.

Polycaprolactone

A biodegradable polymer with the chemical formula (C6H10O2)n used in making polyurethane, adhesives, and biomedical devices.

Biodegradable Polymer

A type of polymer that can be broken down by microorganisms into water, carbon dioxide (or methane), and biomass, within a reasonably short period of time.

Lactone Monomer

A singular molecular unit that can form polymers and contains a lactone ring, a cyclic ester.