One Advantage of a Fixed Exchange Rate System Compared to a Floating

question 41

Multiple Choice

One advantage of a fixed exchange rate system compared to a floating or managed float exchange rate system is

• A) business planning becomes much easier.
• B) there is no need for government intervention.
• C) it allows the exchange rate to reflect demand and supply in the market.
• D) it eliminates the possibility of depreciation during a recession.

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