Author Question: The effects of a decrease in export demand A) is a powerful argument in favor of fixed rates. B) ... (Read 120 times)

javeds · **on:** Jun 30, 2018

The effects of a decrease in export demand

A) is a powerful argument in favor of fixed rates.
B) is a powerful argument in favor of flexible rates.
C) shows the difficulties in determining which exchange rate is better.
D) is a powerful argument in favor of fixed rates only in the short run.
E) is a powerful argument in favor of fixed rates only in the long run.

Question 2

Comparing fixed to flexible exchange rate, the response of an economy to a temporary fall in foreign demand for its exports is

A) output actually falls less under fixed rate than under floating rate.
B) output actually falls more under fixed rate than under floating rate.
C) output actually remains the same under fixed rate than under floating rate.
D) the currency value grows in a fixed rate system and falls in a flexible system.
E) output grows in a fixed rate system and falls in a flexible system.