Exchange rate regimes or systems range from a pure 'free float',where the exchange rate is determined by the unfettered market forces of demand and supply,to a 'fixed-peg system'-more generally referred to as a fixed exchange rate system.The almost pure form of a fixed-pegged system was the:
A)purchasing power standard.
B)floating exchange rate.
C)Fisher effect.
D)gold standarD.

Question

Quizplus · Accepted Answer

The gold standard was a pure form of a fixed-pegged exchange rate system, where the currency was fixed to a specific amount of gold. Therefore, the best choice is D. The purchasing power standard, floating exchange rate, and Fisher effect are not related to fixed-pegged exchange rate systems.

Exchange Rate Regimes or Systems Range from a Pure 'Free