Proponents of the Flexible Exchange Rate System Argue That Under

Multiple Choice

Proponents of the flexible exchange rate system argue that under a fixed exchange rate system

A) it is very unlikely that the exchange rate will diverge from the equilibrium exchange rate.
B) nations that experience persistent trade deficits might be tempted to impose trade barriers.
C) nations will not have to sacrifice their domestic economic policy goals in order to maintain the fixed exchange rate.
D) the economy will be more stable than under a flexible exchange rate system.