If you were elected to choose between a fixed, freely floating, or a managed float exchange rate…

1. If you were elected to choose between a fixed, freely floating, or a managed float exchange rate system, which would you choose for your home country? Why? Explain and justify your answer.
2. Assume that both the U.S. and Europe experience high unemployment. How can the U.S. central bank attempt to adjust the dollar value to reduce this problem? Is the European central Bank likely to go along with the U.S. central bank’s strategy or retaliate? Why?
3. If a government wants to correct a current account deficit, why can’t it simply enforce restrictions on imports?

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