One Argument for a Fixed Exchange Rate System Is That

question 65

Multiple Choice

One argument for a fixed exchange rate system is that

• A) governments can contract their money supply without worrying about the need to maintain parity.
• B) trade balance adjustments do not require the intervention of the International Monetary Fund.
• C) it ensures that governments do not expand the monetary supply too rapidly, thus causing high price inflation.
• D) speculations in exchange rates boost exports and reduce imports.
• E) each country should be allowed to choose its own inflation rate.

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Definitions:

Judgmental

Quick to make judgments or assessments, often without full information or in a critical manner.

Subjective

Relating to personal perspectives, feelings, or opinions rather than external, objective facts.

I Data

Information that is introspectively accessible, referring to data about oneself that can include thoughts, feelings, and personal experiences.

Multiple Causes

The idea that events or phenomena often have several contributing factors rather than a single source.