The Main Problem with a System of Floating Exchange Rates

Multiple Choice

The main problem with a system of floating exchange rates is that it

A) leads to excessively high exchange rates that reduce worldwide international trade
B) creates uncertainty and reduces the profitability of international trade
C) increases the amounts of goods exported and imported so it reduces domestic demand
D) generates equilibrium for some exchange rates but not all
E) destabilizes democracies and facilitates the growth of alternative political systems