One Limitation of Maintaining a Fixed Exchange Rate System Is

question 371

Multiple Choice

One limitation of maintaining a fixed exchange rate system is that:

• A) it subjects the country's exchange rate to wide fluctuations in the foreign exchange market.
• B) it provides an incentive for the country to change its inflation policy frequently.
• C) the country may not be able to use monetary policy to achieve other goals, such as full employment.
• D) it leads to wide fluctuations in the growth rate.

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Definitions:

Visceral Organs

Encompasses the organs within the main cavities of the body, especially those within the abdominal cavity, such as the liver, stomach, and intestines.

Malodorous

Having a bad smell; emitting an unpleasant odor.

Pulse Oximetry

A noninvasive method to measure the oxygen saturation level of the blood, usually done with a clip-like device on a finger.

Wound Healing

The biological process by which the skin and tissues repair themselves after injury.