Which of the following is not a serious disadvantage associated with flexible exchange rates?
A)uncertainty which tends to diminish trade
B)worsening terms of trade if there is a sizeable depreciation of a country's currency
C)longer lags in eliminating balance of payments surpluses or deficits
D)greater challenges in managing and designing domestic macroeconomic policies.

Question

Quizplus · Accepted Answer

Flexible exchange rates can quickly adjust to eliminate balance of payments surpluses or deficits, so longer lags are not typically a disadvantage associated with them.

Which of the Following Is Not a Serious Disadvantage Associated