_________________ are the most extreme form of a fixed exchange rate system,short of adopting a common currency or dollarization.
A)Currency board arrangements
B)Adjustable peg systems
C)Crawling peg systems
D)Managed floating exchange rate systems

Question

Quizplus · Accepted Answer

Currency board arrangements are the most extreme form of a fixed exchange rate system as they involve the strictest commitment to maintaining a fixed exchange rate. Under a currency board arrangement, a country completely outsources its monetary policy to a currency board, which sets the exchange rate and maintains it by buying and selling its own currency in unlimited quantities. This leaves no room for discretion or adjustment by the central bank, making it a very rigid system.

_________________ Are the Most Extreme Form of a Fixed Exchange