Under a fixed exchange rate system, U.S. inflation would have a greater impact on inflation in other countries than it would under a freely floating exchange rate system.

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Under a fixed exchange rate system, the value of a country's currency is tied to the value of another currency. This means that if the U.S. experiences inflation, causing the value of the U.S. dollar to decrease, the value of other countries' currencies tied to the U.S. dollar would also decrease, leading to inflation in those countries as well. Under a freely floating exchange rate system, the value of a country's currency is determined by market forces and is not directly tied to any other currency, so U.S. inflation would have less impact on inflation in other countries.

Under a Fixed Exchange Rate System, U