Why Would a Country Adopt Floating Exchange Rates

question 61

Multiple Choice

Why would a country adopt floating exchange rates?

• A)Floating exchange rates allow a government the freedom to pursue its own monetary policies.
• B)Floating exchange rates reduce the likelihood of abrupt changes in currency values.
• C)Floating exchange rates are beneficial for borrowers of foreign funds.
• D)Floating exchange rates make international trade less risky.

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Definitions:

Less Regulation

The concept of less regulation involves reducing government rules and oversight to potentially enhance business operations and market freedoms.

Airlines

Companies that provide air transport services for traveling passengers and freight.

Trucking

Refers to the transportation of goods and products by large vehicles over land.

Conglomerate Merger

A combination of two companies that are involved in totally unrelated business activities.