Under which of the following systems does a government commit itself to keep fluctuations in its monetary unit within a narrow range?
A) the gold standard
B) the multinational exchange standard
C) flexible exchange rates
D) equation of exchange rates
E) fixed exchange rates

Question

Quizplus · Accepted Answer

Under fixed exchange rates, a government commits to keeping its currency within a narrow range of values relative to a chosen fixed currency, such as the US dollar. This reduces fluctuations in the monetary unit of a country.

Under Which of the Following Systems Does a Government Commit