MCQOPTIONS
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| 1. |
The biggest disadvantage of a fixed exchange rate is the |
| A. | increased probability of high inflation. |
| B. | tradeoff between supporting the exchange rate and adjusting the trade balance. |
| C. | tradeoff between supporting the exchange rate and maintaining full employment. |
| D. | increased probability of a trade deficit. |
| Answer» B. tradeoff between supporting the exchange rate and adjusting the trade balance. | |