Question

URGENT

In which situation is a country most likely to choose a fixed exchange rate for its currency?
A. A country expects its currency to be more valuable than other countries’ currency.
B. A country is confident that its currency’s market value will remain steady over time.
C. A country that ants to encourage other countries to freely buy and sell its currency.
D. A country wants to make sure that it’s currency is stable in all economic situations.

Answer 1

D. A country wants to make sure that its currency is stable in all economic situations.

Step-by-step explanation:

In the given options, the situation where a country is most likely to choose a fixed exchange rate for its currency is:

D. A country wants to make sure that its currency is stable in all economic situations.

Choosing a fixed exchange rate allows a country to maintain stability in its currency value and minimize fluctuations. It provides certainty for trade and investment by ensuring that the exchange rate remains constant and predictable. This can be particularly advantageous for countries that want to promote economic stability and attract foreign investment.