All of the Following Are True Regarding Flexible Exchange Rates

question 41

Multiple Choice

All of the following are true regarding flexible exchange rates except

• A)Speculators typically push exchange rates away from the long-term equilibrium.
• B)The quantity of foreign exchange demanded equals the quantity supplied.
• C)Exchange rate movements alter relative prices and may disrupt import and export flows.
• D)Some people are hurt while others are helped by exchange rate movements.

---

Definitions:

Managerial Assignment

Tasks or responsibilities assigned to managers or supervisory positions within an organization.

Balance Sheet Approach

A method in international human resource management that aims to equalize the purchasing power of employees working abroad to that of employees in the home country.

Expatriate Compensation

The package of salary, benefits, allowances, and incentives offered to employees who are sent to work in a foreign country by their employer.

Economic Forces

Represent the various external factors that influence the economy and affect businesses and consumers, such as inflation, interest rates, and unemployment rates.