The country of Ninook is adversely affected by trade deficits and so the government wants to move to a floating exchange rate system.The government believes that moving to a floating rate would help adjust trade imbalances.However,a political group in Ninook is opposing this.As critics of floating exchange rates,they claim that trade deficits are determined by the

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The critics are correct that trade deficits are determined by the balance between a country's savings and investment. A floating exchange rate system can help adjust trade imbalances by allowing the currency to depreciate, making exports cheaper and imports more expensive, but it is not the sole determinant of trade deficits. The balance between savings and investment also affects a country's ability to finance its imports and exports.

The Country of Ninook Is Adversely Affected by Trade Deficits