An Advantage to Floating Exchange Rates Is That They Help

question 400

Multiple Choice

An advantage to floating exchange rates is that they help:

• A) insulate countries from currency fluctuations.
• B) insulate countries from recessions starting in other countries.
• C) keep exports from replacing domestic jobs.
• D) keep export prices down.

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Definitions:

Corporate Bond

A debt security issued by a corporation and sold to investors to raise financing for capital-intensive projects or operational costs.

Primary Market

The financial market where new securities are issued and sold for the first time, typically directly by the issuer to investors.

Secondary Market

A financial market where previously issued financial instruments such as stock, bonds, options, and futures are bought and sold.

Interest

The cost of borrowing money, often expressed as a percentage rate over a period of time, or the income earned from lending money.