Fixed-Rate Relationships Among Currencies Could Not Stay Fixed, According to Obstfeld

question 23

Multiple Choice

Fixed-rate relationships among currencies could not stay fixed, according to Obstfeld and Rogoff, because:

• A) the volume of global transactions started to exceed most countries' foreign exchange reserves, so governments couldn't intervene to sustain the value of their currency.
• B) the complexity of international trade demanded return of the gold standard.
• C) Walmart and other leading firms argued successfully at the Federal Reserve that fixed rates were too costly to maintain.
• D) the EU had decided to float the euro.

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Non-Arab Population

Individuals or groups who are not of Arab descent, residing within or outside the Arab world.

Population Transfer

The forcible removal of a group of people from the territory they have occupied.

Native Americans

The indigenous peoples of the United States, including both the mainland and Alaska Natives, who have varying cultures, languages, and histories.

U.S. Army

The land warfare service branch of the United States Armed Forces, responsible for land-based military operations.