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One Argument Favoring a Fixed-Exchange-Rate System Is That It

Question 23

Multiple Choice

One argument favoring a fixed-exchange-rate system is that it:


A) allows monetary policy to be used for stabilizing output and prices.
B) reduces exchange-rate uncertainty, thereby promoting more international trade.
C) leads to excessive growth of the money supply.
D) requires no actions on the part of the central bank to implement.

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