Which of the Following Is Not a Disadvantage of Exchange-Rate

question 129

Multiple Choice

Which of the following is not a disadvantage of exchange-rate targeting?

• A) It relies on a stable money-inflation relationship.
• B) The targeting country gives up an independent monetary policy.
• C) The targeting country is left open for a speculative attack.
• D) It can weaken the accountability of policymakers.

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Definitions:

Economic Recession

a period of temporary economic decline characterized by a decrease in GDP, income, employment, and trade, typically lasting from six months to a year.

Communism

Economic system in which all property would be shared equally by the people of a community under the direction of a strong central government.

Pure Competition

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information, leading to firms being price takers.

Tax Exemptions

Deductions from taxable income or specific revenues not subject to taxation, often granted to encourage certain activities or investments.