One of the Disadvantages of a Fixed Exchange Rate System

question 92

Multiple Choice

One of the disadvantages of a fixed exchange rate system is:

• A)​too much stability in exchange rates.
• B)​import and export industries forego the benefits of highly variable exchange rates.
• C)​that to maintain fixed exchange rates, nations must give up control of their monetary policies.
• D)​None of the above are disadvantages of a fixed exchange rate system.

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Definitions:

Temporary Accounts

Accounts that are closed at the end of each accounting period, including revenue, expense, and withdrawal accounts, used to track transactions for a particular period.