An Exchange Rate Regime in Which Policymakers Peg the Value

An exchange rate regime in which policymakers peg the value of the domestic currency to the currency of another nation and allow the domestic currency to fluctuate around the parity within bands of plus or minus less than 1 percent of parity is called a:

A) pegged with bands system.
B) currency basket system.
C) conventional peg.
D) dirty or managed float.

Correct Answer:

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