Supporters of floating exchange rates
A) argue that floating rates help adjust trade imbalances.
B) argue that floating rates lead to a more stable world monetary system.
C) claim that trade deficits are determined by the balance between savings and investment in a country.
D) claim that trade deficits are not determined by the external value of currency.

Question

Quizplus · Accepted Answer

Those in favor of floating exchange rates argue that floating rates help adjust trade imbalances. Critics of floating rates claim that trade deficits are determined by the balance between savings and investment in a country, not by the external value of its currency.

Supporters of Floating Exchange Rates