In recent Canadian experience the flexible exchange rate:
A) made adjustment to external economic shocks more difficult.
B) made domestic monetary policy less effective in controlling inflation.
C) facilitated adjustment to external changes in demand for energy and commodity exports.
D) was unaffected by changes in external economic conditions.

Question

Quizplus · Accepted Answer

Flexible exchange rates allow a country's currency to adjust in value in response to external economic changes, such as fluctuations in demand for its exports. In Canada's case, this flexibility has helped the economy adjust to changes in the global demand for energy and commodities, which are significant components of its export sector.

In Recent Canadian Experience the Flexible Exchange Rate