Suppose a Nation Fixes the Exchange Rate of Its Currency

question 39

Multiple Choice

Suppose a nation fixes the exchange rate of its currency relative to a specific amount of
Gold. This system is an example of a

• A) managed float system.
• B) free-floating exchange rate system.
• C) commodity standard system.
• D) fiat standard system.

---

Definitions:

Rifts

Linear zones where the Earth's crust and lithosphere are being pulled apart, often associated with volcanic activity and the formation of new oceanic crust.

Basalts

Dark, fine-grained volcanic rock formed from the rapid cooling of low-viscosity lava rich in magnesium and iron.

Ural Mountains

A mountain range that runs approximately from north to south through western Russia, serving as a natural dividing line between Europe and Asia.

Plate Boundary

The border between two tectonic plates, which can be sites of earthquakes, volcanoes, and mountain building.