Question
Foreign exchange reserves are: I. stocks of foreign currency. II. gold and silver. III. bonds of foreign governments. a.I, II, and III b.I only c.III
- Foreign exchange reserves are:
I. stocks of foreign currency.
II. gold and silver.
III. bonds of foreign governments.
a.I, II, and III
b.I only
c.III only
d.II only
2) The nominal exchange rate is:
I. the evaluation and ranking of different global stock exchanges.
II. the price of a country's money in terms of another country's money.
a.I only
b.II only
c.I and II
d.neither I nor II
3)Major drawbacks of a fixed exchange rate do NOT include:
a.commerce among countries is more uncertain and riskier.
b.resources must be diverted to the accumulation of large foreign exchange reserves.
c.monetary policy cannot be used to stabilize output and the inflation rate.
d.exchange controls must be imposed at the cost of administrative red tape and corruption.
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