Pegged Exchange Rate Means That the Value of a Currency

question 18

Multiple Choice

Pegged exchange rate means that the value of a currency is

• A) fixed against other currencies based on an agreement.
• B) not determined by free market forces.
• C) fixed relative to a reference currency.
• D) independent of the valuations of other currencies.

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Definitions:

Trade

The process of purchasing, selling, or trading goods and services among individuals, companies, or nations.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance without excess supply or demand.

Tax Policy

The set of laws and regulations governing how taxes are collected, managed, and utilized by a government.

Tax Revenue

The income that is gained by governments through taxation, which is used to fund public services, infrastructure, and government operations.