One of the Advantages of Adopting a Fixed Exchange Rate

question 390

Multiple Choice

One of the advantages of adopting a fixed exchange rate system is that it:

• A) reduces uncertainty.
• B) reduces the need for fiscal policy.
• C) increases the strength of monetary policy.
• D) does not require the country to maintain any large foreign exchange reserve.

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Definitions:

Globalization

Refers to the process of deeper integration and interaction among people, companies, and governments worldwide, primarily due to advances in communication and trade.

Domestic Business Markets

Markets within a country's borders where goods and services are bought and sold.

Skills Shortage

A situation where the demand for specific skills exceeds the supply of individuals who have those skills within the labor market.

Domestic Workforce

Employees who work within their own country, often distinguished from an international or global workforce.