Which of the following exchange rate policies uses a target exchange rate,but allows the target to change?
A)crawling peg
B)flexible exchange rate
C)fixed exchange rate
D)moving target
E)none of the above

Question

Quizplus · Accepted Answer

A crawling peg is an exchange rate policy where a target exchange rate is set, but the target can change over time. The central bank will adjust the target rate periodically to reflect changes in the economy. This provides some degree of stability for businesses and investors but also allows for flexibility to respond to changing economic conditions. Flexible exchange rates fluctuate freely based on market forces, a fixed exchange rate is set and does not change, and moving target is not a recognized exchange rate policy.

Which of the Following Exchange Rate Policies Uses a Target