Exchange rate stability cannot be imposed by adoption of ______________________ and official intervention in the foreign exchange markets.
A)pegged exchange rates
B)pegged value rates
C)pegged equity rates
D)pegged volume rates
E)pegged finance rates

Question

Quizplus · Accepted Answer

Pegged exchange rates are a form of fixed exchange rates where a currency's value is fixed against the value of another single currency, a basket of other currencies, or another measure of value, such as gold. However, maintaining this fixed or pegged rate requires significant reserves of foreign currency for market intervention and does not inherently ensure exchange rate stability, as market pressures can still lead to fluctuations and necessitate adjustments to the peg.

Exchange Rate Stability Cannot Be Imposed by Adoption of ______________________