Which of the Following Statements Is False

question 71

Multiple Choice

Which of the following statements is false?

• A)Policy coordination is not needed under a flexible exchange rate regime because exchange rates are free to fluctuate.
• B)Openness of world trade and finance makes for greater interdependence among nations.
• C)Capital mobility means that a change in the interest rate relative to rates in other countries can lead to changes in exchange rates and capital flows.
• D)Monetary policy of the future will likely involve more global cooperation under either a fixed or flexible exchange rate system.

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Definitions:

Allocative Inefficiency

A situation in which resources are not distributed optimally among producers or consumers, leading to a loss in economic efficiency.

Profit-Maximizing Output

The point of production where a company reaches its maximum profit, occurring when marginal cost is equal to marginal revenue.

Marginal Cost

The bump in expenditure for manufacturing an additional unit of a product or service.

Price

The cost in financial terms anticipated, necessitated, or disbursed for something.