Which Exchange-Rate Mechanism Is Intended to Insulate the Balance of Payments

question 107

Multiple Choice

Which exchange-rate mechanism is intended to insulate the balance of payments from short-term capital movements while providing exchange rate stability for commercial transactions?

• A) Dual exchange rates
• B) Managed floating exchange rates
• C) Adjustable pegged exchange rates
• D) Crawling pegged exchange rates

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Definitions:

Facial Beard

Hair growth on the chin, cheeks, and neck area of a person's face, typically observed in adult males.

Major Switching Station

Refers broadly to any neural structure that acts as a hub for transmitting signals from various parts of the body or brain to their intended destinations, crucial in the processing of sensory inputs and motor outputs.

Thalamus

A structure in the brain that acts as a relay station for sensory and motor signals to the cerebral cortex, playing a key role in regulating consciousness, sleep, and alertness.

Corpus Callosum

The large band of neural fibers connecting the two hemispheres of the brain, facilitating interhemispheric communication.