Which of the Following Arguments Is Against the Use of Fixed

question 42

Multiple Choice

Which of the following arguments is against the use of fixed exchange rates?

• A) Monetary discipline is the most important determinant of a strong economy.
• B) Each country has the freedom to choose its own inflation rate.
• C) Market speculation can cause fluctuations in exchange rates.
• D) Governments are likely to expand the monetary supply far too rapidly due to political pressures.

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Definitions:

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Effective exchange of information, where participants successfully transmit, receive, and understand messages.

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