Which of the Following Points Would Not Be Used as an Argument

question 9

Multiple Choice

Which of the following points would not be used as an argument in support of the current international monetary system?

• A) It allows nations to pursue independent monetary policies.
• B) It results in stable exchange rates.
• C) It helps solve trade problems without trade restrictions.
• D) It is flexible and can easily adjust to shocks.
• E) All of the above could be used as arguments supporting the current system.

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Definitions:

Monetarists

Economists convinced that fluctuations in the money supply significantly impact short-term national output and affect price levels over extended periods.

Money Supply

The complete amount of currency resources available within an economy, covering cash, coins, and the totals in checking and savings accounts, at a particular time.

Potential Growth

The estimated rate at which an economy could grow considering the full utilization of its resources without causing inflationary pressures.

Rational Expectations Theory

The hypothesis that individuals make predictions about future economic activities based on past and current information and act rationally on those expectations.