Based on the premise that, other things equal, countries would prefer a fixed exchange rate: Variable rates provide stability in international prices for the conduct of trade.

Question

Quizplus · Accepted Answer

Variable exchange rates can actually lead to instability in international prices because they can fluctuate significantly due to market conditions, making trade more unpredictable. Fixed exchange rates provide more stability in international prices, facilitating smoother trade.

Based on the Premise That, Other Things Equal, Countries Would