Proponents of fixed exchange rates argue that the predictability of the fixed exchange rate:
A)allows monetary policy to be used to stabilize the domestic economy.
B)increases trade and economic integration.
C)decreases trade and economic integration.
D)prevents exchange rate overvaluation.

Question

Quizplus · Accepted Answer

One advantage of fixed exchange rates is that they are predictable. Because of that, fixed exchange rates may increase trade and promote economic integration.

Proponents of Fixed Exchange Rates Argue That the Predictability of the Fixed