Supporters of a Floating Exchange Rate Cited All of the Following

question 44

Multiple Choice

Supporters of a floating exchange rate cited all of the following as advantages over the Bretton Woods system EXCEPT

• A) each country would be able to choose its own long-run inflation rate.
• B) parity changes and speculative attacks would no longer be possible.
• C) countries would be forced to work cooperatively in deciding monetary policy.
• D) exchange rates would be set symmetrically in foreign markets rather than by government decision.
• E) governments would not need to export inflation to decrease domestic unemployment.

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Definitions:

Freight-in

The cost associated with transporting goods or inventory to a company, which is often included as part of the inventory cost.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including both raw materials and labor costs.

Operating Expenses

Expenses incurred during the normal operation of a business, not including the cost of goods sold.

Supplies Expense

The cost incurred from using supplies during an accounting period, recognized as an expense.