Advocates of flexible exchange rates claim that under flexible exchange rates

Question

Quizplus · Accepted Answer

Advocates of flexible exchange rates believe that countries have the ability to influence their exchange rates through monetary and fiscal policy, such as adjusting interest rates or government spending. This means that the United States would have the same opportunity as other countries to influence its exchange rate against foreign currencies. Option A is incorrect because flexible exchange rates do not prevent the United States from influencing its exchange rate. Options C, D, and E are also incorrect as they are not related to the question of whether the United States would have the same opportunity to influence its exchange rate as other countries.

Advocates of Flexible Exchange Rates Claim That Under Flexible Exchange