How is forcing governments to make adjustments to meet their international probl

Question

How is forcing governments to make adjustments to meet their international problems both an advantage and disadvantage of fixed exchange rates?

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It is a disadvantage because governments will have to give up their domestic fiscal and monetary policies. It is a disadvantage because governments will have to use domestic fiscal and monetary policies. It is an advantage because it creates exchange rate stability and credibility in the country's currency. It is an advantage because it creates a fixed exchange rate.

How is forcing governments to make adjustments to meet their international problems both an advantage and disadvantage of fixed exchange rates?

Explanation / Answer

It is a disadvantage because governments will have to use domestic fiscal and monetary policies.

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