Under a pegged exchange rate regime, a country:
A) commits itself to converting its domestic currency on demand into another currency at a fixed exchange rate.
B) will peg the value of its currency to that of a major currency.
C) valuates its currency without attaching it to a reference currency.
D) follows the foreign exchange market to determine the relative value of a currency.

Question

Quizplus · Accepted Answer

Under a pegged exchange rate regime, a country will peg the value of its currency to that of a major currency so that, for example, as the U.S. dollar rises in value, its own currency rises too.

Under a Pegged Exchange Rate Regime, a Country