Proponents of the Fixed Exchange Rate System Argue That

question 55

Multiple Choice

Proponents of the fixed exchange rate system argue that

• A) flexible exchange rates may promote international trade,but under a fixed exchange rate system at least we know what the rates will be from day to day.
• B) under a flexible exchange rate system,there is too great a chance that the exchange rate will diverge from the equilibrium exchange rate.
• C) under a flexible exchange rate system,there is no way of knowing what the exchange rate is at any particular point in time.
• D) under a fixed exchange rate system,there would be only one currency.
• E) none of the above

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Definitions:

Percentage

A ratio or fraction out of 100 used to express quantities.

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A measurement of the heaviness or mass of a person or object, influenced by the force of gravity.