Question

Proponents of a fixed exchange rate system point out that a major drawback of a floating exchange rate is that it is responsible for creating trade deficits. helps eliminate the uncertainty about the value of a currency. leads to uncertainty about the value of goods traded internationally. keeps a nation from trading fairly with other nations. is based on the value of gold held by a nations.

Answer 1

Proponents of a fixed exchange rate system point out that a major drawback of a floating exchange rate is that it C. leads to uncertainty about the value of goods traded internationally.

What is a floating exchange rate?

A floating exchange rate refers to the foreign exchange rate as determined by the forex market based on supply and demand relative to other currencies.

A floating exchange rate system gives the government more scope to use monetary and fiscal policies to achieve domestic economic stability, unlike a fixed exchange rate regime.

Thus, proponents of a fixed exchange rate system point out that a major drawback of a floating exchange rate is that it C. leads to uncertainty about the value of goods traded internationally.

Learn more about exchange rate systems at brainly.com/question/11160294

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