According to Oatley,the world currently has a floating exchange rate system because
A) markets are recognized as the best means of establishing values of currencies.
B) of government corruption that accompanied the timing of dramatic devaluations in a fixed system.
C) the Smithsonian realignments solved the problem of economic imbalances.
D) of political unwillingness to accept the domestic costs imposed by fixed exchange rates.
E) it solved the inflationary problems caused by oil being priced in US dollars.

Question

Quizplus · Accepted Answer

The statement mentions "political unwillingness to accept the domestic costs imposed by fixed exchange rates" as the reason for the floating exchange rate system, indicating that the governments or political entities were not willing to bear the cost of maintaining a fixed exchange rate system. This choice aligns with this reasoning. The other options are either not a reason or incorrect statements.

According to Oatley,the World Currently Has a Floating Exchange Rate