The government of country A has decided to maintain an exchange rate of 1 unit of its currency for 6 U.S.dollars in the long run.Country A can be said to have a ________.

Question

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Country A has decided to maintain a fixed exchange rate of 1 unit of its currency for 6 U.S. dollars in the long run, indicating a fixed exchange rate system. A nominal exchange rate system refers to the exchange rate at which currencies are traded in the market, without any specific government intervention. A fully flexible exchange rate system allows the exchange rate to be determined by market forces without any intervention or control from the government. A managed exchange rate system involves government intervention to influence the exchange rates but does not necessarily indicate a fixed exchange rate system.

The Government of Country a Has Decided to Maintain an Exchange