Economists typically view a ______ exchange rate system as providing the central bank of a small open
Economy ______ control over monetary policy for achieving domestic goals (such as fighting inflation),
Than a _____ exchange rate system.
A) flexible; more; fixed
B) flexible; less; fixed
C) fixed; more; flexible
D) combination of fixed and flexible; more; pure flexible

Question

Quizplus · Accepted Answer

Economists generally believe that a flexible exchange rate system allows a country's central bank more autonomy in using monetary policy to achieve domestic objectives, such as controlling inflation, compared to a fixed exchange rate system. This is because a flexible exchange rate can adjust to economic conditions without the need for the central bank to intervene directly in the currency market.

Economists Typically View a ______ Exchange Rate System as Providing