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Which Statement Is True of a World with a System

Question 185

Multiple Choice

Which statement is true of a world with a system of fixed exchange rates as opposed to one with floating rates?


A) It requires less world liquidity or reserves.
B) It creates less confidence about future values of currencies.
C) It facilitates the transmission of shifts in economic conditions between countries.
D) It increases the role of the central banks in foreign exchange markets.

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