Which of the Following Is Not a Potential Disadvantage of Freely

question 5

Multiple Choice

Which of the following is not a potential disadvantage of freely floating exchange rates?

• A) They require larger amounts of international reserves than other exchange systems
• B) Demand schedules for imports and exports may be price speculation
• C) There may occur large amounts of destabilizing speculation
• D) Capital movements among nations may be hindered via exchange rate fluctuations

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