The Advantage of a System of Fixed Exchange Rates Over

question 5

Multiple Choice

The advantage of a system of fixed exchange rates over one where exchange rates are flexible is that

• A)the government gains more control over the economy.
• B)floating exchange rates impose risks on importers and exporters from unpredictable exchange rates.
• C)exchange controls become unnecessary.
• D)fiscal and monetary policy can focus more on domestic conditions.

---

Definitions:

Package Carrier

A company or service that specializes in the transport and delivery of parcels and packages.

Private Fleet

A company-owned collection of vehicles used to transport goods, as opposed to hiring external transportation services.

Inventory Cost

The total cost associated with holding and managing inventory, including storage, insurance, taxes, opportunity costs, and depreciation.

Supply Chain Network

A more complex version of a supply chain, involving multiple suppliers, manufacturers, and distribution channels creating a web of interconnected businesses.