Why might a central bank oppose a country moving to a fixed exchange rate?
A) Fixed exchange rates limit the ability of central banks to change interest rates to affect the domestic economy.
B) Fixed exchange rates often lead to higher inflation,which central banks tend to oppose.
C) Fixed exchange rates force central banks to hold more foreign currency reserves than they would prefer.
D) Fixed exchange rates increase the risk of private bank failures,which the central bank would need to bail out.
Correct Answer:
Verified
Q19: What domestic institution is usually responsible for
Q20: What is a fixed exchange rate?
A)A trading
Q21: Which country did President Trump,during his campaign,threaten
Q22: Why do we need international monetary regimes?
A)Each
Q23: Why would a country adopt floating exchange
Q25: The Bretton Woods Monetary System can best
Q26: Which of the following events in the
Q27: There have been numerous international monetary orders
Q28: Why can interactions in an international monetary
Q29: What is a national paper currency standard?
A)Governments
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