Under a pegged exchange rate regime,a country will peg the value of its currency to _______
A) an index of world currencies maintained by the World Bank.
B) that of a major currency.
C) an index of "peer nation" currencies.
D) an index of its historic currency rates.
E) the index of its major trading partners' currencies.

Question

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Under a pegged exchange rate regime, a country pegs the value of its currency to that of a major currency, such as the U.S. dollar, the Euro, or the Japanese yen. This helps to stabilize the country's exchange rate and promote international trade and investment. Pegging to an index of currencies maintained by the World Bank or historic currency rates may not be as effective in achieving stability, while pegging to peer nation currencies or trading partners' currencies can be more difficult to manage and adjust over time.

Under a Pegged Exchange Rate Regime,a Country Will Peg the Value