One Disadvantage of a Floating Exchange Rate System Compared to a Fixed

question 51

Multiple Choice

One disadvantage of a floating exchange rate system compared to a fixed or managed float exchange rate system is

• A) it does not allow the exchange rate to reflect demand and supply in the market.
• B) it is difficult to maintain.
• C) it can make business planning difficult.
• D) it eliminates the possibility of depreciation during a recession.

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Definitions:

Cognitive Perspective

A psychological approach that focuses on how mental processes such as perception, memory, and problem-solving work and how they influence behavior.

Behavioral Perspective

An approach to psychology that focuses on observable behaviors and the ways in which they are learned.

Observable Responses

Measurable actions or reactions of an organism in response to external or internal stimuli.

Conscious Processes

Mental activities of which an individual is aware, involving perception, thinking, and remembering.