When the Economy Is Disturbed by a Change in the Output

question 73

Multiple Choice

When the economy is disturbed by a change in the output market

• A) a fixed exchange rate has an advantage over a flexible rate.
• B) a floating exchange rate has an advantage over a fixed rate.
• C) a crawling peg exchange rate has an advantage over a flexible rate.
• D) a floating exchange rate has the same effect as a fixed rate.
• E) a flexible exchange rate is not as effective as a fixed exchange rate.

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Definitions:

Present Value

The present-day valuation of money or cash flows expected in the future, calculated with a designated rate of return.

Investment

The act or method of distributing assets, typically funds, in anticipation of earning revenue or gains.

Account Value

The total monetary worth of an investment or trading account at any given point in time.

Interest Rate

The rate charged or paid for the use of money, typically expressed as an annual percentage of the principal.