Given our experience with the gold standard and the Bretton Woods agreement,most economists today would probably agree that
A) both floating and fixed exchange rate systems are less desirable than the gold standard.
B) floating exchange rate systems offer a definite advantage over fixed exchange rate systems.
C) fixed exchange rate systems offer a decided advantage over floating exchange rate systems.
D) neither floating nor fixed exchange rate systems can operate effectively in today's world market.
E) fixed and floating exchange rate systems should be employed simultaneously to have a beneficial impact.

Question

Quizplus · Accepted Answer

Most economists today would probably agree that floating exchange rate systems offer a definite advantage over fixed exchange rate systems. The experience with the gold standard and the Bretton Woods agreement showed that fixed exchange rate systems can be vulnerable to speculative attacks and can create imbalances in the global economy. Floating exchange rate systems, on the other hand, allow for more flexibility in adjusting to external shocks and can help to maintain equilibrium in the balance of payments.

Given Our Experience with the Gold Standard and the Bretton