Which of the Following Is an Argument for a Fixed

question 119

Multiple Choice

Which of the following is an argument for a fixed exchange rate system?

• A)Governments can contract their money supply without worrying about the need to maintain parity.
• B)Trade balance adjustments do not require the intervention of the International Monetary Fund.
• C)It ensures that governments do not expand the monetary supply too rapidly, thus causing high price inflation.
• D)Speculations in exchange rates boost exports and reduce imports.
• E)Each country should be allowed to choose its own inflation rate.

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