Which One of the Following Statements Is TRUE

question 29

Multiple Choice

Which one of the following statements is TRUE?

• A)A fixed exchange rate automatically cushions the economy's output and employment by allowing an immediate change in the relative price of domestic and foreign goods.
• B)A flexible exchange rate does not automatically cushions the economy's output and employment by allowing an immediate change in the relative price of domestic and foreign goods.
• C)A flexible exchange rate automatically cushions the economy's output and employment by allowing an immediate change in the relative price of domestic and foreign goods.
• D)A flexible exchange rate automatically cushions the economy's output and employment by allowing an immediate change in the absolute price of domestic and foreign goods.
• E)A fixed exchange rate automatically cushions the economy's output and employment by allowing an immediate change in the absolute price of domestic and foreign goods.

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Definitions:

IBM

A multinational technology and consulting company known for its hardware, software, and extensive range of computing services.

Synthetic Lease

A financing method allowing a company to lease an asset while keeping it off its balance sheet, ensuring both tax advantages and off-balance-sheet financing.

Operating Lease

A contract that allows for the use of an asset but does not convey rights of ownership of the asset.

After-Tax Cost

The actual cost to a company or individual after considering the effects of taxes, often used in evaluating the cost of financing options.