The Purpose of Creating the European Exchange Rate Mechanism (ERM)was

question 55

Multiple Choice

The purpose of creating the European exchange rate mechanism (ERM) was to

• A)base trade and investment on comparative advantage.
• B)prevent currencies from appreciating.
• C)create barriers to trade.
• D)let exchange rates float more freely.

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Definitions:

Creditors

Individuals or institutions that lend money or extend credit to others, expecting repayment in the future with interest.

Debtors

Individuals or entities that owe money to another entity, typically as a result of borrowing funds.

Business Owners

Individuals who legally possess a company, assume major risks, and enjoy the benefits from its operation and growth.

Inventories

Quantities of goods or materials that a company holds for the purpose of sale or production at a given time.