Critics of the Managed Floating Exchange Rate System Argue That

question 119

Multiple Choice

Critics of the managed floating exchange rate system argue that it

• A)is dominated by G-8 nations.
• B)is a "nonsystem" with unclear rules.
• C)increased the growth in world trade at too fast a rate.
• D)puts too much reliance on the adjustable-peg mechanism for stabilizing exchange rates.

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Definitions:

Opportunity Cost

The cost of the next best alternative that must be foregone as a result of making a particular decision.

Limited Resources

A term that describes the finite availability of resources such as time, money, and raw materials, which are necessary for the production of goods and services.

Economics

The social science that studies how individuals, governments, firms, and nations make choices on allocating resources to satisfy their wants and needs, and how these choices interact in markets.

Retail Value

the price at which a product is sold to the end consumer in a retail market.