Supporters of a Floating Exchange Rate Cited All of the Following

question 44

Multiple Choice

Supporters of a floating exchange rate cited all of the following as advantages over the Bretton Woods system EXCEPT

• A) each country would be able to choose its own long-run inflation rate.
• B) parity changes and speculative attacks would no longer be possible.
• C) countries would be forced to work cooperatively in deciding monetary policy.
• D) exchange rates would be set symmetrically in foreign markets rather than by government decision.
• E) governments would not need to export inflation to decrease domestic unemployment.

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Definitions:

Business Cartels

Groups of independent businesses that regulate production, pricing, and marketing by agreement among members to limit competition.

Minimum Wage

Legislation requiring that workers be paid at least the stated minimum hourly rate of pay.

Tax Rates

The percentage at which an individual or corporation is taxed on their income or profits.

Economic Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in GDP, real income, employment, industrial production, and wholesale-retail sales.