A Major Problem with Countries Setting Fixed Exchange Rates for Their

question 35

Multiple Choice

A major problem with countries setting fixed exchange rates for their currencies is

• A)Some participating countries are likely to experience continuing balance-of-payments deficits.
• B)The foreign exchange reserves of participating countries will always be depleted.
• C)Import and export prices will probably become more unstable.
• D)The fixed rate will have to be maintained by currency market intervention.

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