Country X has a floating rate for luxury goods and a lower rate for semi-manufactured goods.Which of the following is most likely used by Country X?
A)import deposit requirements
B)multiple exchange rates
C)import licensing
D)quantity controls

Question

Quizplus · Accepted Answer

Country X most likely uses multiple exchange rates to differentiate between the floating rate for luxury goods and the lower rate for semi-manufactured goods. This allows for greater control over the flow of these goods, and can be used to encourage local production of certain goods while still allowing for imports of luxury items. Import deposit requirements, import licensing, and quantity controls do not address the issue of differentiating between rates for luxury and semi-manufactured goods.

Country X Has a Floating Rate for Luxury Goods and a Lower