Which of the following statements is (are) correct?
A. Under a fixed exchange rate system, potential conflicts arise between the goals of internal balance and external balance.
B. With a fixed exchange rate system, there is an absence of conflicts between internal and external balance goals.
C. Countries may find that expansionary policies, which might be desired in order to reduce the unemployment rate, lead to income levels that are too high to balance the trade account and could lead to balance of payments problems.
Tap an option to check your answer.