Which Statement Is True of a World with a System

question 275

Multiple Choice

Which statement is true of a world with a system of fixed exchange rates as opposed to one with floating rates?

• A)It requires less world liquidity or reserves.
• B)It creates less confidence about future values of currencies.
• C)It facilitates the transmission of shifts in economic conditions between countries.
• D)It increases the role of the central banks in foreign exchange markets.

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Definitions:

Technical Subsystem

The component of a larger system focused on the technological and operational functions necessary for the system's overall performance.

Production Function

An economic model that describes the relationship between inputs and the quantity of output produced.

Boundary-Spanning

refers to actions or roles within an organization that involve interaction with the external environment, such as engaging with clients, suppliers, or other stakeholders.

Organizing Function

The process of arranging resources and tasks to achieve objectives, typically within a business or organizational setting.