Which of the following is NOT an argument for central bank intervention?
A) Exchange rates are highly volatile.
B) Exchange rate fluctuations have an adverse effect on the macroeconomy.
C) The market knows better than economic policy makers the appropriate level of the exchange rate.
D) Central bank intervention can smooth out fluctuations in exchange rates.

Question

Quizplus · Accepted Answer

The argument that "the market knows better than economic policy makers the appropriate level of the exchange rate" is not an argument for central bank intervention, but rather an argument against it, suggesting that market forces should determine exchange rates without interference from central banks.

Which of the Following Is NOT an Argument for Central