There Is Some Evidence That Adopting a Pegged Exchange Rate

question 87

Multiple Choice

There is some evidence that adopting a pegged exchange rate regime _________________.

• A) reduces unemployment in a country
• B) moderates inflationary pressure in a country
• C) increases global GNP
• D) decreases global GNP
• E) increases GNI growth within the country

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Definitions:

Capital-intensive

Capital-intensive describes a business process or industry that requires large amounts of capital investment in heavy machinery and equipment to produce goods or services.

Accelerated Depreciation

A depreciation method that allocates larger amounts of the cost of an asset to the earlier years of its useful life.

Depreciation Expense

The allocated portion of the cost of a fixed asset that is written off each year over the asset's useful life.

Straight-line Method

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.