Advocates of fixed exchange rates claim that flexible exchange rates:
A)increase the volume of international trade and investment
B)lead to stabilizing speculation
C)are inflationary
D)makes internal balance of the economy more difficult to attain

Question

Quizplus · Accepted Answer

Advocates of fixed exchange rates argue that flexible exchange rates can lead to inflationary pressures due to currency depreciation, which can increase import prices and overall price levels.

Advocates of Fixed Exchange Rates Claim That Flexible Exchange Rates