Under a fixed exchange rate system, imbalances in the current and capital accounts would persist if countries had different
A)growth rates.
B)inflation rates.
C)interest rate structures.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Under a fixed exchange rate system, imbalances in the current and capital accounts can persist if countries experience different growth rates, inflation rates, and interest rate structures. Different growth rates can affect trade balances, different inflation rates can affect competitiveness, and different interest rate structures can influence capital flows.

Under a Fixed Exchange Rate System, Imbalances in the Current