A Common Argument for Fixed Exchange Rates Is That They

question 72

Multiple Choice

A common argument for fixed exchange rates is that they

• A)give central banks greater freedom in adjusting their economy's level of output.
• B)forever free the central bank from have to adjust the exchange rate to fundamental changes in the economy.
• C)make trade more costly, and thus encourage domestic citizens to buy domestically produced output.
• D)all of the above
• E) none of the above

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Definitions:

Antitrust Law

Legislation enacted to prevent monopolies, promote competition, and guard against anti-competitive practices in the marketplace.

Market Shares

Describes the portion of a market controlled by a particular company or product, often expressed as a percentage of total sales in that market.

Laissez-faire Antitrust

An approach to antitrust policy that minimizes government intervention in the market, based on the belief that markets should regulate themselves.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, leading to a decrease in the per-unit cost as output increases.