The Figure Given Below Depicts the Foreign Exchange Market for British

question 28

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-One of the advantages of floating exchange rates is that:

• A)consumers always know how much imported goods cost.
• B)businesses always know, in advance, what future exchange rates will be.
• C)countries are free to pursue their own macroeconomic policies without maintaining exchange rates.
• D)countries cannot act independently and must thus coordinate their macroeconomic policies.
• E)the global interest rate tends to decline to the lowest possible level.

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Definitions:

Economic Forces

Factors that influence the behavior of the economy at both micro and macro levels, including but not limited to supply and demand, inflation, and unemployment rates.

Social Structure

refers to the organized pattern of social relationships and social institutions that together compose society.

Evolutionary Concept

A principle in biology that explains the process by which organisms change over generations through variations in heritable characteristics.

Social Facts

Durkheim's concept for norms, values, structures, and social practices that exert influence on individual behaviors and are external to the individual.