Which of the following is characteristic of the fixed exchange rate system?
A) utilized by most advanced economies
B) rates based on supply and demand forces
C) The value of currency is set relative to the value of another.
D) allows for monetary policy flexibility

Question

Quizplus · Accepted Answer

Fixed exchange rate systems are characterized by the value of a currency being pegged or set relative to the value of another currency, a basket of other currencies, or another measure of value, such as gold. This system contrasts with floating exchange rates, where currency values are determined by market forces.

Which of the Following Is Characteristic of the Fixed Exchange