Advocates of Floating Rate Suggested It Is Favorable for Economies

question 81

Multiple Choice

Advocates of floating rate suggested it is favorable for economies for the following reasons except

• A) it discourages attack from foreign exchange speculators because of the fact that exchange rate adjustment is immediate.
• B) it helps stabilize the shock effect on unemployment in case of economic changes such as fall in export demand.
• C) it automatically matches the domestic inflation with ongoing foreign inflation.
• D) it gives every country the opportunity to guide its own monetary conditions at home.
• E) it brings the LR exchange rate to the level predicted by PPP without government policy decisions.

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Definitions:

Singularity

A hypothetical future point at which technological growth becomes uncontrollable and irreversible, resulting in unforeseeable changes to human civilization.

Long-Term Success

Achieving a consistent level of goal attainment and positive outcomes over an extended period.

Perceived Benefits

The advantages or improvements believed to be associated with a product or service from the consumer's perspective.

Purchase Price

The amount paid to buy a product or service, which can include additional costs such as taxes, shipping, and handling.