A Reason Why Fixed Exchange Rate Systems Might Lower Growth

question 68

Multiple Choice

A reason why fixed exchange rate systems might lower growth is that

• A)inflation may be higher.
• B)monetary policy cannot be used.
• C)they are more risky.
• D)they deter international trade.

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Definitions:

Rising Wages

An economic condition where the average wage level in an economy increases over time, potentially affecting inflation and purchasing power.

GDP

Gross Domestic Product (GDP) measures the total economic output of a country within a given time period, reflecting the overall health of its economy.

Health Care Spending

The total amount of money spent on health services, medications, and health-related research and public health initiatives within a country.

Medicare

A federal program in the United States that provides health insurance to people over the age of 65 and to certain younger people with disabilities.