A-LevelEconomicsInternational economic issues9708/12 · Feb/Mar 2023 · Q271 Mark
Why might a government prefer to use 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.
✓ Correct answer
A: It allows the government more independence in policy making.
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