In a Freely Floating Exchange Rate System, High U

question 64

True/False

In a freely floating exchange rate system, high U.S. inflation rate may be magnified. This is because the depreciation of the dollar would result in more expensive foreign imports, thus reducing foreign competition.

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Definitions:

Pia Mater

The delicate innermost layer of the meninges, the membranes surrounding the brain and spinal cord.

Cerebral Aqueduct

A narrow channel located in the midbrain that connects the third and fourth ventricles of the brain, allowing the flow of cerebrospinal fluid.

Third Ventricle

A narrow fluid-filled space in the brain, part of the ventricular system that lies between the two halves of the thalamus.

Fourth Ventricle

A structure in the brain that lies within the hindbrain and is responsible for circulating cerebrospinal fluid.