A pegged rate system that includes policy cooperation is usually:
A) difficult to maintain.
B) a good compromise for nations who want exchange rate stability, stable output, and some flexibility.
C) not a good bet for nations who are large trading partners.
D) administered by large private banks.

Question

Quizplus · Accepted Answer

A pegged rate system that includes policy cooperation allows nations to maintain exchange rate stability and stable output while also allowing for some flexibility. This is a good compromise for nations who want the benefits of both fixed and flexible exchange rates. While it may be difficult to maintain and may not be a good bet for large trading partners, it is still a viable option for smaller nations. The system is not administered by large private banks, but instead requires cooperation and coordination among national governments and central banks.

A Pegged Rate System That Includes Policy Cooperation Is Usually