Which of the Following Is Not an Advantage of a Fixed

question 31

Multiple Choice

Which of the following is not an advantage of a fixed exchange rate system?

• A)Inflation is somewhat self-correcting.
• B)Central banks can more easily engage in expansionary policy even if other countries do not.
• C)Unemployment is somewhat self-correcting.
• D)Exchange rate risk is reduced.

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Definitions:

Competitor's Profits

Refers to the earnings generated by firms or businesses operating in the same market or industry, often analyzed to benchmark performance or develop competitive strategies.

Nash Equilibrium

A concept in game theory where no player can gain by changing strategies if other players keep theirs unchanged.

Best Response

In game theory, a strategy that yields the highest payoff for a player, given the strategies chosen by other players.

Simultaneous Move Game

A scenario in game theory where all players make their decisions at the same time without knowing the choices of others.