Economist Charles Kindleberger (A Proponent of Fixed Exchange Rates Mentioned

question 5

Multiple Choice

Economist Charles Kindleberger (a proponent of fixed exchange rates mentioned in the text) would agree with which of the following statements?

• A) It is better to leave the international value of the domestic currency to the free market forces than to have to sacrifice domestic economic goals in order to support a certain predetermined value of the currency.
• B) There is too great a chance that the supported exchange rates will diverge significantly from the equilibrium exchange rates,which would create persistent problems and lead to an overall decrease in international trade.
• C) With no certainty of what one nation's currency will be worth in terms of other nations' currencies,international trade is held below what it could be.
• D) a and b

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Definitions:

Cognitive Structures

Mental frameworks or patterns that help individuals organize and interpret information.

Perceptual Abilities

The capacity to interpret, analyze, and give meaning to sensory information.

Concrete Operational

A stage in Piaget's theory of cognitive development where children gain the ability to think logically about concrete events and understand the concept of conservation.

Piagetian Theory

Piagetian Theory refers to the cognitive development theory proposed by Jean Piaget, which suggests that children move through four stages of mental development.