The adoption of a fixed exchange rate precludes the pursuit of a money supply or an inflation target.

Name: The adoption of a fixed exchange rate precludes the pursuit of a money supply or an inflation target.
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Question

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A fixed exchange rate system requires the central bank to maintain the currency's value relative to another currency, which limits its ability to independently control the money supply or target inflation.

The Adoption of a Fixed Exchange Rate Precludes the Pursuit