A IMF Study Concluded That Countries with Pegged Exchange Rate

question 118

Multiple Choice

A IMF study concluded that countries with pegged exchange rate regimes had an average annual inflation rate of ______________, compared with 14 percent for intermediate regimes and 16 percent for floating regimes.

• A)4 percent
• B)18 percent
• C)14 percent
• D)8 percent
• E)0.8 percent

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Definitions:

Active Approach

Strategies or policies actively implemented by governments or institutions to manage economic variables or outcomes, such as inflation or unemployment.

Passive Approach

A strategy or method that involves minimal intervention, often referring to investment strategies or management styles.

Self-correction

The adjustment process by which economic variables return to their long-run equilibrium without government intervention, often seen in business cycle contexts.

Nominal Wages

The amount of money paid to workers before adjustments for inflation, representing the face value of compensation received.