Which of the following is a position taken by advocates of a floating exchange rate system?
A)Each country should be allowed to choose its own inflation rate.
B)Speculation can cause unnecessary fluctuations in exchange rates.
C)Unpredictability of exchange rate movements has made business planning difficult.
D)Removal of the obligation to maintain exchange rate parity would destroy a government's monetary control.

Question

Quizplus · Accepted Answer

While advocates of floating rates argue that each country should be allowed to choose its own inflation rate (the monetary autonomy argument),advocates of fixed rates argue that governments all too often give in to political pressures and expand the monetary supply far too rapidly,causing unacceptably high price inflation.

Which of the Following Is a Position Taken by Advocates