Fixed Exchange Rates

question 111

Multiple Choice

Fixed exchange rates

• A) were established at the Bretton Woods conference in 1944.
• B) are maintained by government intervention in the foreign exchange market.
• C) are used by most countries today to stabilize foreign trade.
• D) are under control of the World Bank.
• E) are no longer used.

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Definitions:

Marginal Cost Element

The increase in total cost that arises from producing one additional unit of a good or service.

MB = MC Decision Framework

A principle in economics where optimal decision-making is achieved when the marginal benefit (MB) of an action equals its marginal cost (MC).

Interest-Rate Cost of Borrowing

The cost associated with borrowing funds, typically expressed as a percentage of the amount borrowed.

R&D Expenditure

Funds allocated by a business or government towards research and development projects to innovate or improve products or services.