Many Economists Believe That a Major Shortcoming of a System

Multiple Choice

Many economists believe that a major shortcoming of a system of flexible exchange rates is

A) the inability of central banks to conduct independent monetary policy
B) real exchange rate variability caused by relatively sticky wages and prices
C) real exchange rate variability caused by supply shocks, fiscal shocks, and changes in trade flows
D) the fact that domestic interest rates can never deviate from interest rates in other countries
E) both B) and C) are often cited, but by different groups of economists