Which of the Following Is True Under Flexible Exchange Rates

question 47

Multiple Choice

Which of the following is true under flexible exchange rates?

• A)Expansionary monetary policy leads to an appreciation of the domestic currency
• B)Expansionary fiscal policy reduces interest rate
• C)Expansionary monetary policy is very effective in increasing income and production
• D)Fiscal policy is very effective in increasing income and production

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Definitions:

Total Fixed Costs

The total of all expenses that do not change, irrespective of the amount of production or the level of business operations.

Workers

Workers refer to individuals engaged in any form of employment or labor, contributing their skills and efforts in exchange for compensation.

Variable Costs

Costs that vary directly with the level of production or sales, such as materials and labor.

Total Cost

The sum of all costs incurred by a business in producing a good or service, including both fixed and variable costs.