Advocates of floating rates pointed out that
A) removal of the obligation to peg currency values would restore monetary control to central banks.
B) imposing of the obligation to peg currency values would restore monetary control to central banks.
C) removing of the obligation to peg currency values would restore fiscal control.
D) imposing of the obligation to peg currency values would restore fiscal control.
E) imposing of the obligation to peg currency would restore monetary control to the consumer.

Question

Quizplus · Accepted Answer

Advocates of floating rates argue that with floating exchange rates, central banks would have the flexibility to use monetary policy to achieve domestic goals, such as controlling inflation and promoting economic growth. This is because under floating rates, the external value of the currency is determined by market forces, allowing the central bank to focus on domestic goals rather than maintaining a fixed exchange rate.

Advocates of Floating Rates Pointed Out That