Adhering to a strict fixed exchange rate system means that e

Adhering to a strict fixed exchange rate system means that

each nation improves control over its fiscal policy and aggregate demand.

each nation loses some control of its monetary policy and its domestic economy.

no country will experience inflation or recession.

each nation improves control over its money supply.

Solution

Answer Option C: No country will experience inflation or recession.

Explanation:- under fixed exchange rate system, a country’s currency exchange value is fixed with another country’s currency, it is also called pegged exchange rate. It is mainly done to stabilize the value of one currency with another currency or with highly prevailing currency in the international market. This kind of exchange rate is useful for initiating trade and investment between two countries. So under fixed exchange no country will experience inflation or recession because the country’s currency exchange value is fixed with another country’s currency.