Which Is Not a Serious Disadvantage Associated with Freely flUctuating

question 308

Multiple Choice

Which is not a serious disadvantage associated with freely fluctuating exchange rates?

• A) uncertainty which tends to diminish trade
• B) greater instability in unemployment levels
• C) longer lags in eliminating balance of payments surpluses or deficits
• D) swings in the terms of trade related to currency appreciation or depreciation

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