With a fixed exchange rate system,a nation cannot conduct effective monetary policy.

Name: With a fixed exchange rate system,a nation cannot conduct effective monetary policy.
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Question

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In a fixed exchange rate system, the value of a currency is pegged to another currency or a commodity, which limits the country's ability to adjust its money supply and interest rates independently. As a result, a fixed exchange rate system restricts a nation's ability to conduct effective monetary policy.

With a Fixed Exchange Rate System,a Nation Cannot Conduct Effective