Which One Is Not a Disadvantage of a Freely Floating

question 3

Multiple Choice

Which one is not a disadvantage of a freely floating exchange rate system?

• A)It can adversely affect a country that has high unemployment.
• B)It can adversely affect a country that has high inflation.
• C)The government may intervene to change the value of a given currency.
• D)The exchange rate risk is high and may be costly to manage.

---

Definitions:

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered or used but not yet paid for.

Accrued Interest

The interest that has been earned but not yet paid, accumulating on loans, bonds, or any other financial instruments over a period of time.

Notes Receivable

Financial assets representing amounts owed to a company by debtors, typically evidenced by formal instruments with specified payment terms.

Factoring Fee

A charge assessed for the service of factoring, where a business sells its receivables to a third party at a discount.