A Potential Limitation of Freely Floating Exchange Rates Is That

question 97

Multiple Choice

A potential limitation of freely floating exchange rates is that:

• A) Countries require a larger amount of international reserves than otherwise
• B) Countries are unable to initiate economic policies to combat unemployment
• C) Exchange rates may experience wide and frequent fluctuations
• D) Demand tends to be highly sensitive to price movements

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Definitions:

Murray

A psychologist known for his theory of personality, which emphasizes the influence of needs and motives on individual behavior.

Correlation Analysis

A statistical method used to examine the relationship between two quantitative variables without assuming a causative link.

Structure of Personality

The organized pattern of behaviors and attitudes that distinguishes an individual and that is formed by the integrated components of id, ego, and superego in psychoanalytic theory.

Cattell

Raymond Cattell, a psychologist known for his work in personality, intelligence theory, and factor analysis.