How Would You Define a Currency Board

question 18

Multiple Choice

How would you define a currency board?

• A) the process by which non-pegged interest rates are allowed to fluctuate
• B) the stockpiling of international reserves by developing countries
• C) using the dollar to carry out all domestic transactions, making the domestic currency a currency in name alone
• D) a constraint placed on monetary policy
• E) The monetary base is backed entirely by foreign currency and the central bank holds no domestic assets.

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Definitions:

Recognition

The process of identifying something or someone previously seen, known, or experienced.

Social Changes

Alterations in the social structure, patterns, and behavior of a society over time.

System Justification

System Justification is a theory in social psychology that describes the tendency of people to justify and defend the status quo, even if it is at odds with their own interests or fairness.

Hindsight Bias

A bias towards believing one would have known the outcome in advance after an event is concluded.