The Credibility Theory of the EMS Implies in Effect That

question 24

Multiple Choice

The credibility theory of the EMS implies in effect that the political costs of violating international exchange rate agreements

• A) cannot restrain governments from depreciating their currency.
• B) can restrain governments from depreciating their currency.
• C) cannot restrain governments from depreciating their currency in the short run.
• D) cannot restrain governments from depreciating their currency in the long run.
• E) can control the political policies of member nations.

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Definitions:

Maintenance

The routine tasks and repairs conducted to keep equipment, buildings, or machinery in working order and prevent its deterioration.

Utilities

Services provided to the public or households such as water, electricity, natural gas, sewage treatment, and telecommunications, often subject to government regulations and possibly eligible for tax deductions in certain business contexts.

Rental Expenses

Costs incurred in the operation, maintenance, and improvement of a property rented out, which can often be deducted for tax purposes.

Deductible

The amount paid out of pocket by the policyholder before an insurance company pays a claim.