A major problem with managed exchange rates is

Question

Quizplus · Accepted Answer

The determination of the value of a particular currency and which country will maintain that value is a major problem with managed exchange rates. It is difficult to accurately determine the value of a currency and policymakers may have conflicting goals in maintaining that value. This can lead to instability and uncertainty in international trade and investment. Additionally, managing exchange rates may require significant resources such as foreign exchange reserves, which can lead to depletion over time. A constant excess supply of U.S. dollars may also be a problem, but it is not necessarily a defining characteristic of managed exchange rates.

A Major Problem with Managed Exchange Rates Is