When the backing ratio is higher, the peg is:
A) less stable.
B) higher.
C) safer.
D) less credible.

Name: When the backing ratio is higher, the peg is: A) less stable. B) higher. C) safer. D) less credible.
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Question

Quizplus · Accepted Answer

A higher backing ratio means that there is more reserve currency available to support the pegged currency, making the peg safer because it is better supported against speculative attacks or fluctuations in demand.

When the Backing Ratio Is Higher, the Peg Is