Which of the following is a disadvantage of a floating exchange rate system?

CA Foundation · Business Economics · MTP · September 2025
Which of the following is a disadvantage of a floating exchange rate system?
(A) A. Requires large forex reserves
(B) B. Creates rigid monetary policy
(C) C. Currency fluctuations create trade uncertainty
(D) D. Fixed import/export prices

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Currency fluctuations create trade uncertainty

Topics: International Trade

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic