Stefano
Fri Aug 09 2024
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5 answers
1119
What are the disadvantages of a fixed exchange rate?
As an inquisitive individual delving into the nuances of finance, I must pose the question: What are the drawbacks inherent in adopting a fixed exchange rate system? Undoubtedly, such a mechanism offers stability and predictability, but are there any pitfalls that policymakers and investors should be wary of? Does it stifle economic growth, hinder monetary policy autonomy, or expose nations to external shocks? I am eager to explore the nuances and complexities of this topic further.
