In a Pegged Exchange Rate System, a Country Will Peg

question 129

Multiple Choice

In a pegged exchange rate system, a country will peg the value of its currency to:

• A)an index of the world's major currencies determined by the International Monetary Fund.
• B)an average of the historic values of its own currency.
• C)a major currency.
• D)the currencies of the countries with which it trades most frequently.

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Definitions:

Benevolence

The quality of being well-meaning; kindness and generosity towards others.

Integrity

The quality of being honest and having strong moral principles, or the state of being whole and undivided.

I-P-O Model

Input-Process-Output Model, a framework used to understand how teams or systems transform inputs into outputs.

Sequential

Pertaining to or forming a sequence; arranged in or following a logical or chronological order.