Fixed exchange rates offer the benefit of:
A) domestic monetary policy consistent with that of major trading partners.
B) domestic inflation rates equal to those of major trading partners.
C) stable exchange rates and reduced uncertainty in trade receipts and payments.
D) all of the above.

Question

Quizplus · Accepted Answer

Fixed exchange rates provide the benefit of stable exchange rates, which reduces uncertainty in international trade. They also necessitate that a country's monetary policy is aligned with that of its major trading partners to maintain the fixed rate, which can lead to similar inflation rates among these countries.

Fixed Exchange Rates Offer the Benefit Of