A country that suffers from bouts of high inflation and wants to fix its exchange rate should tie its currency to the currency of a:

Question

Quizplus · Accepted Answer

Tying the currency to a country with a strong reputation for low inflation can help to stabilize the inflation rate of the country in question and thereby fix its exchange rate. This is because the low inflation country's economy is stable and less prone to fluctuations, and its currency is therefore less volatile and more reliable as a basis for the tied currency's value.

A Country That Suffers from Bouts of High Inflation and Wants