A 'Pegged Exchange Rate' Is One in Which

question 118

Multiple Choice

A 'pegged exchange rate' is one in which:

• A)the currency is backed by a fixed amount of gold.
• B)demand and supply adjust so that there are no shortages or surpluses of currency in the market.
• C)foreign exchange traders accept only a fixed price for their goods, regardless of the demand and supply for the currency.
• D)the government defines its currency to be worth a certain amount in terms of another currency and ensures that the rate remains at that level.

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Definitions:

New Technology

New technology refers to the development and application of innovative tools, machines, techniques, and methods of operation to improve efficiency, solve problems, and create value.

World Trade Organization

The World Trade Organization (WTO) is an international organization designed to supervise and liberalize international trade.

International Trade

The exchange of goods and services between countries, which allows for greater efficiency and productivity through the principle of comparative advantage.

Trade Disputes

Conflicts that arise between countries regarding the policies, practices, or conditions of trade often leading to formal complaints or sanctions.