Why Might a Nation Seek to Maintain a Pegged Exchange

question 57

Multiple Choice

Why might a nation seek to maintain a pegged exchange rate?

• A) It makes business planning easier for firms involved in the global economy.
• B) It removes the need to intervene in the foreign exchange market.
• C) It ensures that the exchange rate will remain at its equilibrium.
• D) It makes their currency more attractive on the foreign exchange market.

---

Definitions:

Fixed Pay

A predetermined amount of salary or wages that an employee receives on a regular basis, such as weekly or monthly, regardless of performance.

Maslow's Needs Hierarchy

Maslow's Hierarchy of Needs is a psychological theory that categorizes human needs into a five-tier model, ranging from basic (physiological) needs to higher-level (self-actualization) needs.

Humanistic Approach

A psychological perspective emphasizing the individual's inherent drive towards self-actualization and creativity, focusing on personal growth and subjective experience.

Holistic

An approach that emphasizes the importance of the whole and the interdependence of its parts.