Economics 9708 · AS & A Level · 6.4

6.4 — practice question

For what reasons could a government choose to adopt floating exchange rates?

  • AIt allows the government more independence in policy making.
  • BIt encourages the government to build up its foreign exchange reserves.
  • CIt eliminates the instability of free markets.
  • DIt gives firms more confidence in future costs and prices.

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