Which of the Following Reasons Is a weakness of the Explanation

question 34

Multiple Choice

Which of the following reasons is a weakness of the explanation of exchange-rate policy changes according to the electoral approach?

• A) It tells us little about exchange-rate policy at other times other than election periods.
• B) Different political parties pursue distinct macroeconomic objectives.
• C) Right wing parties are typically less concerned about unemployment and more concerned about inflation.
• D) It does not assume that all governments value monetary autonomy more than exchange-rate stability.
• E) Exchange rate policy is determined by the group that has the greatest influence regardless of elections.

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Definitions:

Deposit

A sum of money placed with a financial institution for safekeeping or to earn interest, often used to secure a financial obligation or as part of a financial transaction.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument to present value, reflecting the time value of money.

Present Value

The present value is the present-day valuation of a future money sum or cash flow series, determined by a given rate of return.

Simple Interest

A method of calculating the interest charge on a loan or financial product based on the original principal amount and the rate of interest over a specific time period, without compounding.