Advocates of Flexible Exchange Rates Claim That Under Flexible Exchange

question 105

Multiple Choice

Advocates of flexible exchange rates claim that under flexible exchange rates, a currency

• A) depreciation caused by increasing the money supply would reduce unemployment by increasing world demand for them.
• B) appreciation caused by increasing the money supply would reduce unemployment by increasing world demand for them.
• C) appreciation caused by decreasing the money supply would reduce unemployment by increasing world demand for them.
• D) appreciation caused by increasing the money supply would increase unemployment by increasing world demand for them.
• E) appreciation caused by increasing the money supply would increase unemployment by decreasing world demand for them.

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Definitions:

Standard Deviations

Measures of the amount of variation or dispersion of a set of values, indicating how much the values differ from the mean of the set.

Candy Company

A business entity that specializes in the production and sale of confectioneries such as chocolates, candies, gums, and other sweet items.

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1.

Normal Distribution

A probability distribution that is symmetrically centered around its mean, showing that data near the mean are more frequent in occurrence than data far from the mean.