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Which Is Not a Serious Disadvantage Associated with Freely Fluctuating

Question 134

Multiple Choice

Which is not a serious disadvantage associated with freely fluctuating exchange rates?


A) uncertainty which tends to diminish trade
B) greater instability in unemployment levels
C) longer lags in eliminating balance of payments surpluses or deficits
D) swings in the terms of trade related to currency appreciation or depreciation

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