One argument for a system of fixed exchange rates such as that established under the Bretton Woods agreement in 1944 is that fixed exchange rates
A) prevent countries from having chronic balance-of-payments deficits.
B) maintain the price of gold.
C) help all countries carry out domestic full-employment monetary and fiscal policies.
D) minimize volatility in international currency markets.
E) eliminate the need for governments to buy and sell their own currencies in foreign exchange markets.

Question

Quizplus · Accepted Answer

Fixed exchange rates, as established under the Bretton Woods system, help minimize volatility in international currency markets by providing stability and predictability in exchange rates. This stability is beneficial for international trade and investment.

One Argument for a System of Fixed Exchange Rates Such