Conservatives Argue That the Shift to Floating Exchange Rates

question 33

Multiple Choice

Conservatives argue that the shift to floating exchange rates

• A) was desirable because although it created balance-of-payments deficits, the real value of a nation's currency was established by free markets.
• B) was not desirable because it allowed nations to more easily manipulate their foreign exchange rates.
• C) was desirable because it eliminated balance-of-payment deficits and reflected the real value of a nation's currency.
• D) made the effects of international inflation worse.

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Definitions:

Constant Rate

A fixed percentage rate applied over a certain period which does not change.

Dividend Per Share

The amount of dividends paid to shareholders per share, indicating the distribution of company profits to shareholders.

Annual Dividend

The sum of all dividends a shareholder gets from a company over the course of a year.

Dividend Increases

An action taken by a company's board of directors to raise the amount of money paid to shareholders in the form of dividends, usually reflecting the company's strong financial health and positive future earnings outlook.