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A Fixed Exchange Rate Regime

Question 67

Multiple Choice

A fixed exchange rate regime:


A) modeled along the lines of the Bretton Woods system will not work.
B) allows each country to choose its own inflation rate.
C) is characterized by speculation that adds to the uncertainty surrounding future currency movements.
D) leads to a situation where governments under political pressures expand monetary supply too rapidly,causing unacceptably high price inflation.

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