Governments use a multiple exchange rate system to ________.
A)increase their budget surplus
B)reduce exports
C)control foreign-exchange convertibility
D)limit deposit requirements

Question

Quizplus · Accepted Answer

Governments use a multiple exchange rate system to control foreign-exchange convertibility, which means they regulate the availability and amount of foreign currency that can be exchanged for the domestic currency. This can help prevent currency speculation, manage inflation, and maintain a stable balance of payments. The other choices are not relevant to the use of a multiple exchange rate system.

Governments Use a Multiple Exchange Rate System to ________