Proponents of a freely floating exchange rate system maintain that it is superior to a fixed exchange rate system because
A) the balance of payments adjusts continuously to exchange-rate movements
B) governments can establish independent monetary and fiscal policies
C) disorderly exchange rate movements can disrupt trade and investment patterns
D) floating exchange rates operate under simplified institutional arrangements

Question

Quizplus · Accepted Answer

The Answer of Proponents of a freely floating exchange rate system maintain that it is superior to a fixed exchange rate system because
A) the balance of payments adjusts continuously to exchange-rate movements
B) governments can establish independent monetary and fiscal policies
C) disorderly exchange rate movements can disrupt trade and investment patterns
D) floating exchange rates operate under simplified institutional arrangements

Proponents of a Freely Floating Exchange Rate System Maintain That