If a Country Pegs Its Currency to a Foreign Currency

question 54

Multiple Choice

If a country pegs its currency to a foreign currency, it no longer has the ability to use monetary policy to stabilize the economy because:

• A)it no longer has a central bank.
• B)monetary policy must be used to keep the exchange rate's market equilibrium value at its official value.
• C)banks will begin to hold 100 percent of their deposits in reserves.
• D)it must eliminate its currency from circulation and replace it with the foreign currency.

---

Definitions:

Mouth Breathers

Individuals who habitually breathe through their mouths instead of their noses, often due to nasal congestion or anatomical abnormalities.

Nasal Drops

A liquid medication administered through the nose to deliver drugs directly to the nasal mucosa.

Maxillary Sinus

One of the four sets of paranasal sinuses located in the maxillary bones beneath the eyes, involved in the process of humidifying and filtering inhaled air.

Supine Position

Lying on the back with the face up, a common position for various medical examinations and procedures.