Using the exchange rate as an anchor for an adjustment program means:
A) letting the market set the nominal exchange rate.
B) maintaining a crawling peg such that the real exchange rate remains fixed.
C) fixing the official, nominal exchange rate.
D) imposing strict controls over foreign exchange transactions.

Question

Quizplus · Accepted Answer

Using the exchange rate as an anchor for an adjustment program means fixing the official, nominal exchange rate. This is a common strategy used by countries to manage their exchange rate in order to stabilize their economy.

Using the Exchange Rate as an Anchor for an Adjustment