Maintaining a Fixed Exchange Rate Over the Long Run Is

question 131

Multiple Choice

Maintaining a fixed exchange rate over the long run is today

• A) virtually impossible.
• B) more vulnerable to speculative attacks than in the past.
• C) preferable.
• D) possible only in special cases such as maintaining strict capital controls.
• E) aided by technology which allows instant movement of money between financial markets in different countries.

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Definitions:

Cohesive

Characterized by or causing unity and togetherness among individuals or elements in a group.

Social Facilitation

The tendency for people to perform differently, often better, when in the presence of others than when alone.

Dominant Response

The reaction that is most likely to be exhibited by an individual in a given situation due to its strength or frequency of reinforcement.

Ingroup Bias

The inclination to prefer individuals from one's own group above those from outsider groups, frequently resulting in bias and unfair treatment.