Fixed exchange rates provide a more predictable basis for decisions that involve international transactions as the exchange rate is set and does not fluctuate, making it easier for businesses to plan and budget. This also simplifies economic calculations as there is no need to constantly adjust prices based on exchange rate fluctuations. In contrast, floating exchange rates can be more unpredictable and subject to market forces, which can make it more difficult for businesses to make informed decisions.

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A Major Economic

Question 37

Multiple Choice

A major economic

A) benefit of fixed exchange rates is that they simplify economic calculations and provide a more predictable basis for decisions that involve international transactions than do floating rates.
B) benefit of floating exchange rates is that they simplify economic calculations and provide a more predictable basis for decisions that involve international transactions than do fixed rates.
C) cost of fixed exchange rates is that they simplify economic calculations and provide a more predictable basis for decisions that involve international transactions than do currency board rates.
D) benefit of flexible exchange rates is that they simplify economic calculations and provide a more predictable basis for decisions that involve international transactions than do crawling peg rates.
E) benefit of fixed exchange rates is that the value of goods will remain constant across a large region of consumers.

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