If a government wishes to limit or prohibit fluctuations in exchange rates, it will choose:
a. to fix, or peg, the value of its currency to some base currency over a sustained period.
b. to allow its currency to rise or fall in price, depending on a variety of supply and demand factors.
c. to suspend purchases and sales of its currency.
d. to allow the rate to be set by international banks.
Ans: a. to fix, or peg, the value of its currency to some base currency over a sustained period.
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What will be an ideal response?
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What will be an ideal response?