Why Does the GG Schedule Have a Positive Slope

question 42

Multiple Choice

Why does the GG schedule have a positive slope?

• A) The monetary efficiency gain a country gets by joining a fixed exchange rate area falls as its economic integration with the area increases.
• B) The monetary efficiency gain a country gets by joining a fixed exchange rate area rises as its economic integration with the area decreases.
• C) The monetary efficiency gain a country gets by joining a fixed exchange rate area rises as its economic integration with the area increases.
• D) The monetary efficiency gain a country gets by joining a floating exchange rate area rises as its economic integration with the area increases.
• E) The monetary efficiency gain a country gets by joining a fixed exchange rate area is constant after their integration into the area.

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Definitions:

Military Supplies

Equipment, tools, vehicles, and logistical support materials utilized by armed forces for the purposes of national defense and warfare operations.

Impoverished England

Refers to periods in English history marked by widespread poverty and economic hardship.

Neutrality Acts

Legislation passed in the United States during the 1930s aimed at preventing the nation from being drawn into foreign conflicts by limiting American involvement with countries at war.

Munitions

Military weapons, ammunition, and equipment used in warfare.