To Maintain Fixed Exchange Rates When Countries Had Balance of Payments

question 7

Multiple Choice

To maintain fixed exchange rates when countries had balance of payments deficits and were losing international reserves,the ________ would loan ________ countries international reserves contributed by other members.

• A) IMF; deficit
• B) IMF; surplus
• C) World Bank; deficit
• D) World Bank; surplus

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Definitions:

Two-part Tariff

A pricing strategy that includes a fixed fee plus a variable usage fee, commonly used in utility services or subscription-based services.

Marginal Cost

Refers to the cost associated with producing an additional unit of output, highlighting the concept of incremental expense in production processes.

Profit-maximizing

The method firms apply to identify the most beneficial pricing and production levels for profit maximization.

Demand

An economic principle referring to the quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.