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Question

Some people think the United States should return to a system of fixed exchange rates. Defend or oppose this view. Cite examples to support your position.

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Answered 2 years ago
Answered 2 years ago

I think that returning to a fixed exchange rate has more advantages than disadvantages. A fixed exchange rate refers to a country that determines the value of its currency in terms of the value of widely-used currencies. A system with a fixed exchange rate has the following advantages: 1- A fixed exchange rate provides stability to the country's currency. 2- A fixed exchange rate eliminates the periods of inflation in an economy of a country. 3- A fixed exchange rate would lower the money spent on imports. 4- A fixed exchange rate prevents the fluctuation of the purchasing power of the currency, Therefore the country with a fixed exchange rate attracts investors and the investments are increasing.

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