When the Exchange Rate Fluctuates Around a Fixed Central Target,allowing

question 38

Multiple Choice

When the exchange rate fluctuates around a fixed central target,allowing for a moderate amount of fluctuation,while tying the currency to the target central rate,the exchange rate is under:

• A)a horizontal band.
• B)a crawling peg.
• C)a managed float.
• D)an independent float.
• E)a currency board.

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Definitions:

Agribusiness

The portion of the agricultural and food product industries that is dominated by large corporations.

Competitive Markets

Markets where multiple sellers offer a similar product, leading to price competition and quality improvements.

Parity Concept

A principle in economics that suggests that exchange rates between currencies should adjust to reflect changes in price levels between countries.

Farm Subsidies

Financial support provided by the government to farmers, intended to stabilize prices, ensure a sufficient food supply, and support farmers' incomes.