Under the Flexible Exchange Rate Regime,which of the Following Variables

question 41

Multiple Choice

Under the flexible exchange rate regime,which of the following variables in the monetary approach becomes zero and is dropped out of the equation?

• A) Percentage change in domestic credit
• B) Percentage change in spot exchange rate
• C) Percentage change in foreign reserves
• D) Percentage change in money demand

---

Definitions:

Horizontal Price-Fixing

An agreement between competitors at the same level of the supply chain to set prices, restrict production, or reduce competition.

Sherman Act Section 1

A provision of U.S. antitrust law that prohibits contracts, combinations, or conspiracies that restrain interstate or foreign trade.

Violation

The act of disregarding or breaking a law, agreement, or rule, resulting in possible legal penalties or consequences.

Manufacturer

A person or company that makes goods for sale, especially on a large scale through the use of machines.