All of the following are major drawbacks of a fixed exchange rate EXCEPT that:
A) exchange controls must be imposed at the cost of administrative red tape and corruption.
B) resources must be diverted to the accumulation of large foreign exchange reserves.
C) monetary policy cannot be used to stabilize output and the inflation rate.
D) commerce among countries is more uncertain and riskier.
Correct Answer:
Verified
Q201: One limitation of maintaining a fixed exchange
Q202: The advantage of a fixed exchange rate
Q206: The Bretton Woods agreement called for:
A) each
Q210: A major drawback of a floating exchange
Q211: Use the following to answer questions :
Figure:
Q213: One of the advantages of adopting a
Q214: Use the following to answer questions :
Figure:
Q216: A floating exchange rate:
A) retains the ability
Q217: When countries seek to maintain fixed exchange
Q218: The result of the meeting of representatives
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