Which of the Following Arguments Is in Favor of Floating

question 29

Multiple Choice

Which of the following arguments is in favor of floating exchange rates?

• A) A country's ability to expand or contract its money supply should be limited by the need to maintain exchange rate parity.
• B) Maintaining balance of trade equilibrium is not in the best interest of a country.
• C) Countries can isolate themselves from uncertainties when they trade using a mutually agreed on exchange rate.
• D) Governments can restore monetary control by removing the obligation to maintain exchange rate parity.

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