Which of the following does NOT describe why Britain adopted the pegged system (the Exchange Rate Mechanism [ERM]) in 1990?
A) There were benefits to trade and other forms of cross-border exchange.
B) Britain wanted to hold onto the pound as its currency.
C) It was a member of the European Union and fixed rates were good for trade with other members.
D) It hoped to participate in the new common currency when it was launched.

Question

Quizplus · Accepted Answer

The adoption of the pegged system (the Exchange Rate Mechanism [ERM]) in 1990 was not motivated by the hope of participating in the new common currency when it was launched. The common currency, the euro, was not launched until 1999, and the decision to adopt it was made separately from the decision to join the ERM.

Which of the Following Does NOT Describe Why Britain Adopted