When Argentina adopted a currency board, it set the exchange rate at ________ to the dollar, meaning that for every peso in circulation, it needed ________ in reserve.

Question

Quizplus · Accepted Answer

When Argentina adopted a currency board, it set the exchange rate at one peso to one dollar, meaning that for every peso in circulation, it needed one dollar in reserve. Option A is incorrect because the exchange rate was one-to-one, not 10-to-10. Option B is incorrect because it implies that for every peso, Argentina needed five dollars in reserve, which is not accurate. Option D is incorrect because Argentina did not peg its currency to gold. Option E is incorrect because one of the options is correct.

When Argentina Adopted a Currency Board, It Set the Exchange