One Disadvantage of a Fixed Exchange Rate System Compared to a Floating

Multiple Choice

One disadvantage of a fixed exchange rate system compared to a floating or managed float exchange rate system is

A) it is more difficult for central banks to control inflation with a fixed exchange rate system.
B) a fixed exchange rate system does not allow for government intervention.
C) a fixed exchange rate system can worsen inflation if domestic prices of imports rise quickly.
D) a fixed exchange rate system eliminates the possibility of depreciation during a recession.