The hypothesis that intermediate regimes or a lack of full commitment to a peg will eventually destroy it results in nations choosing the extremes of peg or float. This hypothesis is known as:
A) the trilemma of floating.
B) the corners hypothesis.
C) the soft peg dilemma.
D) the temporary contradiction.

Question

Quizplus · Accepted Answer

The hypothesis described in the question is known as the corners hypothesis, in which countries are forced to choose between extreme exchange rate regimes of either a fixed peg or a free float to avoid the potential destruction of an intermediate regime. The other answer choices do not accurately describe this hypothesis.

The Hypothesis That Intermediate Regimes or a Lack of Full