Author Question: What is a currency board? What will be an ideal response?[br][br][b][color=#9E3EA8]Question ... (Read 45 times)

rachel9 · **on:** Jun 30, 2018

What is a currency board?

What will be an ideal response?

Question 2

The reason protectionism remains strong in the United States is that

A) economists can produce any result they are hired to produce.
B) economists cannot persuade the general public that free trade is beneficial.
C) economists do not really understand how the real world works.
D) the losses associated with protectionism are diffuse, making lobbying by the public impractical.
E) economists cannot agree on trade policy recommendations.

billybob123 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

A currency board is a government institution that exchanges domestic currency for foreign currency at a fixed rate of exchange. It is normally established to increase the credibility of a foreign exchange arrangement and thus increase confidence in the system. Currency boards achieve a credible fixed exchange rate by holding a stock of the foreign currency equal to 100 percent of the outstanding currency supply of the nation.

Answer to Question 2

D