Under a ____________,a nation is free to utilize all polices at its disposal to achieve its goal of full employment with price stability without having to worry about external balance.
A)flexible exchange rate system
B)fixed exchange rate system
C)managed peg
D)gold standard

Question

Quizplus · Accepted Answer

Under a flexible exchange rate system, a nation's currency is allowed to float freely in response to market forces without any interference from the government or central bank. This means that the country would not have to worry about external balance or maintaining a fixed exchange rate. Instead, the country can focus on implementing policies to achieve full employment with price stability without being constrained by the need to maintain a specific exchange rate.

Under a ____________,A Nation Is Free to Utilize All Polices