Advocates of Fixed Exchange Rates Claim That Flexible Exchange Rates

question 32

Multiple Choice

Advocates of fixed exchange rates claim that flexible exchange rates:

• A)increase the volume of international trade and investment
• B)lead to stabilizing speculation
• C)are inflationary
• D)makes internal balance of the economy more difficult to attain

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Definitions:

Interval

A range between two numbers or points, often used to specify a period of time or a statistical range.

Standard Normal Distribution

A specific probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Z-score

A metric that depicts how far a certain value stands from the mean of a collection of values, using the unit of standard deviations for measurement.

First Quartile

The value below which 25% of the data falls, marking the lower quarter of a data set.