Which of the Following Is Not an Advantage to a Country

question 69

Multiple Choice

Which of the following is not an advantage to a country of choosing to fix its exchange rate against a major currency, rather than choosing a floating exchange rate?

• A)Pegging allows the country more flexibility in conducting monetary policy.
• B)Pegging helps avoid inflation in imported goods caused by currency depreciation for countries with significant levels of imports.
• C)Pegging insures that interest payments stemming from foreign loans do not fluctuate with the value of the currency.
• D)Pegging reduces the uncertainty caused by currency fluctuations and thereby simplifies business planning.
• E)Pegging often grants a central bank additional credibility.

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Definitions:

Staff Planners

Individuals responsible for developing, organizing, and managing staff schedules, resources, and future personnel needs.

Communication Gap

A barrier or misunderstanding that occurs during the exchange of information between individuals or groups.

Resistance To Assistance

The phenomenon where individuals or groups are reluctant to accept help or support, often due to pride, mistrust, or fear of dependency.