What is the most powerful argument against a fixed exchange rate?
A) The nation must administer the rates at all currency exchange venues, and it is expensive to do.
B) The nation usually gets opposition from other trading partners who are excluded.
C) The nation has to have a large store of gold on hand to exchange at fixed rates.
D) The nation gives up its ability to control its money supply and affect its own interest rates.
Ans: D) The nation gives up its ability to control its money supply and affect its own interest rates.
You might also like to view...
Increases in consumer wealth will cause an increase in autonomous consumption
Indicate whether the statement is true or false
How has the pattern of fluctuations in overall U.S. business activity changed since World War II?
A) It has become less volatile. B) Expansions have been eliminated. C) Contractions have been eliminated. D) Recessions have been eliminated.