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A Pegged Exchange Rate Is

question 45

Multiple Choice

A pegged exchange rate is:
I.Fixed to a currency or basket of currencies
II.Responds to indicators such as inflation differentials
III.May require intervention to maintain the target pegged rate


Definitions:

Long-run Equilibrium

A state in which all factors of production and outputs are adjusted so that prices, supply, and demand are stable over time.

Law of Demand

The principle that, all else being equal, as the price of a good or service decreases, the quantity demanded increases, and vice versa.

LCD Televisions

A type of television that utilizes Liquid Crystal Display technology to project images, known for their slim profiles and energy efficiency.

Decreasing-cost Industry

An industry where average costs of production decrease as the industry grows, often due to economies of scale.

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