One advantage of a fixed exchange rate system compared to a floating or managed float exchange rate system is
A) business planning becomes much easier.
B) there is no need for government intervention.
C) it allows the exchange rate to reflect demand and supply in the market.
D) it eliminates the possibility of depreciation during a recession.

Question

Quizplus · Accepted Answer

In a fixed exchange rate system, businesses can predict exchange rates in the future, allowing for more accurate planning and budgeting. This stability can be beneficial for businesses that rely heavily on imports or exports.

One Advantage of a Fixed Exchange Rate System Compared to a Floating