Author Question: Under the flexible exchange rate system, when a country tries to stimulate economic growth and ... (Read 78 times)

Cooldude101 · **on:** Jun 30, 2018

Under the flexible exchange rate system, when a country tries to stimulate economic growth and improve its employment rates, it is likely to cause:
a. the domestic inflation rate to rise and the domestic currency to depreciate.
b. the domestic inflation rate to rise and the domestic currency to appreciate.
c. the domestic inflation rate and the value of the domestic currency to remain constant.
d. the domestic inflation rate to fall and the domestic currency to appreciate.
e. the domestic inflation rate to fall and the domestic currency to depreciate.

Question 2

Prior to 1973, the world operated on a system of fixed exchange rates called the Bretton Woods system.
a. True
b. False
Indicate whether the statement is true or false