Why Might Mexico Choose to Maintain a Fixed Exchange Rate

question 72

Multiple Choice

Why might Mexico choose to maintain a fixed exchange rate to the U.S. dollar?

• A) to help it maintain low and stable inflation
• B) to "import" the reputation of the U.S. Federal Reserve
• C) to maintain exchange rate stability
• D) to reduce exchange risk
• E) All of these answers are correct.

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Definitions:

Obedience

Compliance with an order, request, or law or submission to another's authority.

Situational Factors

External influences that affect an individual's behavior, decisions, or performance in a given context or environment.

Authoritarian Personalities

A personality type characterized by strict adherence to authority, submission to authority figures, and a desire for order and conformity.

Obedience

The act of following orders or commands from an authority figure, often studied in social psychology.