Pegged exchange rate means that the value of a currency is
A) fixed against other currencies based on an agreement.
B) not determined by free market forces.
C) fixed relative to a reference currency.
D) independent of the valuations of other currencies.

Question

Quizplus · Accepted Answer

A pegged exchange rate means the value of the currency is fixed relative to a reference currency, such as the U.S. dollar, and then the exchange rate between that currency and other currencies is determined by the reference currency exchange rate.

Pegged Exchange Rate Means That the Value of a Currency