Under a "crawling peg" system, a country's exchange rate:
A) changes at a predetermined rate against the dollar or some other major currency.
B) is fixed except for small, surprise changes.
C) is determined by the central bank of another country.
D) can change, but the changes are kept secret from the public.
E) can fluctuate within a narrow band.

Question

Quizplus · Accepted Answer

A crawling peg system allows a country's exchange rate to adjust gradually at a predetermined rate against a major currency or a basket of currencies. This system combines elements of fixed and floating exchange rate systems, aiming to provide stability while allowing some flexibility to respond to economic conditions.

Under a "Crawling Peg" System, a Country's Exchange Rate