Which of the Following Problems Will Most Likely Occur with a System

question 1

Multiple Choice

Which of the following problems will most likely occur with a system of flexible exchange rates?

• A)macroeconomic instability as exports and imports fluctuate with the exchange rates
• B)government favoritism toward selected importers of goods and services
• C)the emergence of black markets for foreign currency
• D)distortions in trade patterns away from the pattern suggested by comparative advantage

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