The Credibility Theory of the EMS Implies in Effect That

question 40

Multiple Choice

The credibility theory of the EMS implies in effect that the political costs of violating international exchange rate agreements

• A) cannot restrain governments from depreciating their currency to gain the short-term advantage of an economic boom at the long-term cost of higher inflation.
• B) can restrain governments from depreciating their currency to gain the short-term advantage of an economic boom at the long-term cost of higher inflation.
• C) cannot restrain governments from depreciating their currency in the short run.
• D) cannot restrain governments from depreciating their currency in the long run.
• E) cannot restrain governments from depreciating their currency to gain the long-term advantage of an economic boom.

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Definitions:

Glomerulus

Cluster of leaky capillaries enclosed by a Bowman’s capsule.

Distal Tubule

Region of a kidney tubule that connects to a collecting tubule.

Proximal Tubule

Region of kidney tubule nearest Bowman’s capsule.

Ascending Limb

The segment of the loop of Henle in the kidney that transports salts from the filtrate back into the blood, contributing to the concentration of urine.