Exchange Rates That Are Allowed to Fluctuate in the Open

question 243

Multiple Choice

Exchange rates that are allowed to fluctuate in the open market in response to changes in supply and demand are known as

• A) fixed exchange rates.
• B) gold exchange rates.
• C) flexible exchange rates.
• D) IMF exchange rates.

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Definitions:

Collusive Agreements

Refers to arrangements between firms to limit competition, fix prices, or divide markets among themselves, often leading to higher prices for consumers.

Dominant Firm

A company with a major share of market sales, which has the power to influence market conditions and pricing.

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies while the other players keep theirs unchanged, leading to a stable state of the game.

Payoff Matrix

A table that shows the potential outcomes of different strategies in a game or decision-making situation for all involved players.