Countries Are Unlikely to Maintain Fixed Exchange Rates for Long

Multiple Choice

Countries are unlikely to maintain fixed exchange rates for long periods of time because:

A) they lack the tools to do so.
B) fixed exchange rates eventually produce very high levels of inflation.
C) fixed exchange rates impede a nation's ability to use monetary and fiscal policy to pursue domestic macroeconomic goals.
D) fixed exchange rates promote domestic macroeconomic goals at the expense of international macroeconomic goals.