Under a System of Freely Flexible (Floating)exchange Rates an American

question 216

Multiple Choice

Under a system of freely flexible (floating) exchange rates an American trade deficit with Mexico will tend to cause

• A)the United States government to ration pesos to American importers.
• B)a flow of gold from the United States to Mexico.
• C)an increase in the peso price of dollars.
• D)an increase in the dollar price of pesos.

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Definitions:

Convergence Thesis

A theory suggesting that industrial societies, regardless of their initial cultural, social, or economic differences, will eventually develop similar structures and values through the process of industrialization.

Labor Relations Practices

The wide range of strategies, policies, and activities employed by employers, employees, and their representatives to manage employment relationships.

Employer Association

An organization of employers united to promote their collective interests, often in negotiations with labor unions or in lobbying for policies favorable to employers.

Industry-wide Bargaining

Collective bargaining that covers all the workers and employers within an entire industry, rather than just a single employer, to negotiate wages, working conditions, and other employment terms.