Under the Current Managed Float Exchange Rate Regime,countries with Balance

question 36

Multiple Choice

Under the current managed float exchange rate regime,countries with balance of payments deficits frequently do not want to see their currencies depreciate because it makes ________ goods more expensive for ________ consumers and can stimulate inflation.

• A)foreign;foreign
• B)foreign;domestic
• C)domestic;foreign
• D)domestic;domestic

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Definitions:

Henry George

A 19th-century economist known for his advocacy for a single tax on land value to improve social and economic inequalities.

Land

In economics, land comprises all naturally occurring resources whose supply is inherently fixed.

Marginal Revenue Product (MRP)

The additional revenue generated from using one more unit of a factor of production, holding all other factors constant.

Diminishing Returns

A principle stating that as an additional unit of a factor of production is added, while other factors are held constant, the incremental increase in output will eventually decrease.