A Fixed Exchange Rate Regime Imposes Discipline in Two Ways

Multiple Choice

A fixed exchange rate regime imposes discipline in two ways: (1) the need to maintain a fixed exchange rate puts a brake on competitive devaluations and brings stability to the world trade environment and (2) a fixed exchange rate regime imposes what?

A) social discipline on countries, thereby increasing the standard of living
B) economic discipline on countries, thereby increasing gross national product
C) political discipline on countries, thereby curtailing global opportunism
D) monetary discipline on countries, thereby curtailing price inflation
E) currency stability, thereby curtailing trade wars