Critics of flexible exchange rates argue that flexible rates:

Question

Quizplus · Accepted Answer

Critics of flexible exchange rates argue that they increase uncertainty in international trade. This uncertainty arises because the exchange rate is constantly fluctuating in response to supply and demand in the foreign exchange market, making it difficult for businesses to predict and plan for future transactions. Additionally, flexible exchange rates can lead to increased volatility in prices and inflation, which can create further uncertainty for businesses and consumers.

Critics of Flexible Exchange Rates Argue That Flexible Rates