In the Event a Nation Adopts a Currency Board System

question 1

Multiple Choice

In the event a nation adopts a currency board system to peg its exchange rate:

• A) sterilization occurs more often.
• B) sterilization is impossible.
• C) sterilization means all traders have access to currency reserves.
• D) the nation will have to abandon the system whenever the central bank wants to take a holiday.

---

Definitions:

Experimental

Pertaining to a method of research that involves the manipulation of variables to establish cause and effect relationships.

Correlational

Relating to a statistical relationship between two or more variables, where changes in one variable are associated with changes in another, without implying causation.

Confounding Results

Outcomes in research that cannot be accurately attributed to the variables under examination because of the influence of extraneous variables.

Independent Variable

A variable that is manipulated in an experiment to investigate its effect on a dependent variable.