Proponents of Fixed Exchange Rates, Who Argue That Fixed Exchange

question 46

Multiple Choice

Proponents of fixed exchange rates, who argue that fixed exchange rates eliminate uncertainty and therefore promote international trade, sometimes fail to recognize:

• A) that fixed exchange rates may not remain fixed forever.
• B) that fixed exchange rates are more volatile than flexible exchange rates.
• C) that exchange rates do not matter to businesses, so the uncertainty has no impact.
• D) that international trade is bad for the economy and should not be promoted.

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Definitions:

Negative Reinforcement

A behavior modification technique that involves the removal of an unpleasant stimulus to increase the likelihood of a desired behavior.

Negative Reinforcement

A process in behavior conditioning where a response or behavior is strengthened by stopping, removing, or avoiding a negative outcome or aversive stimulus.

Punishment

A consequence applied with the intention of reducing or eliminating an undesirable behavior by introducing a negative stimulus.

Operant Conditioning

A system of education where the level of a response is modified through reinforcement or deterrents.