In a currency board arrangement, participating countries make an explicit legislative
Commitment to
I.use the currency of the largest (based on real GDP)
Participating country.
II.exchange domestic currency for a specified foreign currency at a fixed rate and agreed to
Submit to the board's disciplines to fulfill its obligations.
III.adopt common monetary and fiscal policies prescribed by the board.

Question

Quizplus · Accepted Answer

A currency board arrangement involves a commitment to exchange domestic currency for a specified foreign currency at a fixed rate, but it does not necessarily involve using the currency of the largest participating country or adopting common monetary and fiscal policies prescribed by the board.

In a Currency Board Arrangement, Participating Countries Make an Explicit