Which of the Following Arguments Is in Favor of Floating

question 29

Multiple Choice

Which of the following arguments is in favor of floating exchange rates?

• A) A country's ability to expand or contract its money supply should be limited by the need to maintain exchange rate parity.
• B) Maintaining balance of trade equilibrium is not in the best interest of a country.
• C) Countries can isolate themselves from uncertainties when they trade using a mutually agreed on exchange rate.
• D) Governments can restore monetary control by removing the obligation to maintain exchange rate parity.

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Definitions:

Peak

The highest point or maximum value of a graph, often used in reference to spectra in analytical chemistry indicating a specific property.

C=C Stretching Frequency

Refers to the frequency at which the carbon-carbon double bonds in a molecule vibrate, typically observed in infrared spectroscopy.

IR Absorption

The absorption of infrared radiation by molecules, leading to changes in vibrational energy levels, used in spectroscopy to identify functional groups.

Intense IR Absorption

A characteristic of some materials to strongly absorb infrared radiation at specific wavelengths, indicative of particular molecular bonds.