A Flexible Exchange Rate ________ the Impact of Terms of Trade

question 143

Multiple Choice

A flexible exchange rate ________ the impact of terms of trade shocks on output and employment because of the effect of a change in the exchange rate on ________.

• A)dampens; the terms of trade
• B)dampens; net exports
• C)has no effect on; the inflation rate
• D)magnifies; the interest rate
• E)magnifies; the terms of trade

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Major U.S. Canal

The Panama Canal is a crucial waterway that connects the Atlantic and Pacific Oceans, significantly impacting international maritime trade.