Exchange-Rate Targeting Is Not an Option for the United States

question 125

Multiple Choice

Exchange-rate targeting is not an option for the United States because

• A)the United States is already dollarized.
• B)the United States is too large.
• C)the Fed has adopted a monetary targeting strategy.
• D)the Fed has adopted an inflation targeting strategy.

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Definitions:

Average Product

The output per unit of input, calculated by dividing total product by the quantity of input used in production.

Workers

Individuals who perform services or labor for compensation.

Marginal Product

The extra output generated by adding a single unit of a specific input while keeping all other inputs unchanged.

Price of Capital

the cost of using capital assets for production, often reflected in interest rates or rental charges of capital equipment.