Fear of Floating Is

question 94

Multiple Choice

Fear of floating is:

• A) when the benefits of floating exchange rates outweigh the costs.
• B) when the attractions of fixed exchange rates are large relative to those of floating.
• C) when countries adopt the gold standard.
• D) when countries say they are floating, but fix their exchange rates in practice.

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Definitions:

Nonprice Competition

A marketing strategy where businesses focus on product differentiation, quality, or service rather than altering prices to compete with other firms.

Allocative Efficiency

A state in which resources are allocated in a way that maximizes the overall utility or welfare of society, ensuring that every good or service is produced up to the point where the last unit provides a benefit to consumers equal to the cost of producing it.

Productive Efficiency

A situation where an economy or entity is operating in such a way that it cannot produce more of one good without decreasing the production of another good.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing surplus value created by a firm.