The traditional view of fixed rate systems was that
A)they improved inflation but were worse for growth.
B)they improved stability but were worse for inflation.
C)they improved inflation but worsened stability.
D)they improved growth but worsened inflation.

Question

Quizplus · Accepted Answer

Fixed rate systems are traditionally viewed as improving inflation because they provide a stable exchange rate environment, which can help anchor inflation expectations and reduce inflationary pressures. However, they are not necessarily seen as beneficial for growth, as they can limit a country's ability to respond to economic shocks through monetary policy adjustments.

The Traditional View of Fixed Rate Systems Was That