With a flexible exchange rate,a nation can choose an inflation rate independent of the rest of the world.

Question

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With a flexible exchange rate, a nation can adjust its exchange rate to maintain its desired level of inflation, independent of the rest of the world. This is because the exchange rate will automatically adjust to reflect changes in interest rates, inflation rates, and other economic factors. However, if a country decides to fix its exchange rate, it may have to sacrifice its control over the inflation rate to maintain the level of the exchange rate.

With a Flexible Exchange Rate,a Nation Can Choose an Inflation