The Reason That the Claim That Floating Exchange Rates Result

question 72

Multiple Choice

The reason that the claim that floating exchange rates result in greater economic autonomy for individual countries may not be entirely accurate is that

• A) empirical research finds no supporting data.
• B) policy makers are influenced by the effect of domestic policies on the exchange rate.
• C) there is no generally satisfactory method for measuring economic autonomy.
• D) it is based on the assumption of a gold standard.
• E) countries that run large trade deficits must increase exports to balance trade.

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Definitions:

Mechanistic Bureaucracy

An organizational structure that emphasizes detailed procedures and rules, a clear hierarchy, and a focus on task completion, similar to a machine bureaucracy.

Organic Bureaucracy

An adaptable and flexible organizational structure that allows for responsiveness and change, contrasting with more rigid bureaucracies.

Vertical Keiretsu

Vertical keiretsu refers to a type of business arrangement in Japan where a group of companies, primarily suppliers, are linked through cross-shareholdings and share a major manufacturer or assembler at the top.

Supplier Firms

Companies that provide goods or services to other businesses or customers within a supply chain.