The reason that the claim that floating exchange rates result in greater economic autonomy for individual countries may not be entirely accurate is that
A) empirical research finds no supporting data.
B) policy makers are influenced by the effect of domestic policies on the exchange rate.
C) there is no generally satisfactory method for measuring economic autonomy.
D) it is based on the assumption of a gold standard.
E) countries that run large trade deficits must increase exports to balance trade.

Question

Quizplus · Accepted Answer

Policy makers are often influenced by the effect of domestic policies on the exchange rate, such as interest rate and inflation policies, which can impact the economic autonomy of a country despite its floating exchange rate. Additionally, factors such as global market fluctuations and international trade agreements can also affect a country's economic autonomy, making it difficult to measure and support claims about the relationship between floating exchange rates and economic autonomy.

The Reason That the Claim That Floating Exchange Rates Result