Policy Makers Can Select from a Number of Different Exchange

question 67

Multiple Choice

Policy makers can select from a number of different exchange rate regimes.One of those options is a "hard peg." Which of the following best represents a hard peg?

• A)a revaluation
• B)a currency board
• C)a flexible exchange rate regime
• D)the EMS
• E) none of the above

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Definitions:

Certificates of Deposit

Certificates of Deposit (CDs) are financial products offered by banks that provide a fixed interest rate in exchange for keeping a deposit untouched for a predefined period.

Maturity Date

The specific date on which the principal amount of a bond, loan, or other financial instrument is to be paid back in full to the investor.

Tax Bracket

A range of income taxed at a specific rate by the government, part of a progressive tax system.

Corporate Bond

A debt security issued by a corporation and sold to investors, paying fixed interest over its lifetime and repaying the principal at the bond’s maturity date.