Fixed exchange rates are more volatile than floating exchange rates.

Name: Fixed exchange rates are more volatile than floating exchange rates.
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Question

Quizplus · Accepted Answer

This statement is false. Fixed exchange rates are less volatile than floating exchange rates because they are controlled by central banks, which intervene in the market to maintain the fixed rate. On the other hand, floating exchange rates are determined by market supply and demand, making them more subject to volatility and fluctuations.

Fixed Exchange Rates Are More Volatile Than Floating Exchange Rates