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A possible drawback of the flexible exchange rate regime is that it can be expensive to maintain because the central bank must have enough foreign
A possible drawback of the flexible exchange rate regime is that
- it can be expensive to maintain because the central bank must have enough foreign exchange reserves to manage its currency value.
- it involves exchange rate uncertainty that may hamper international trade and investment.
- it may create an anti-competitive trade environment and potentially leads to a trade war.
- none of the options
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