Among the statements below pick the one which best describes current policy of different countries central banks with respect to exchange rate regimes. Select one – the most appropriate answer.

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BlackTom AI · Accepted Answer

Contextual understanding of global exchange rate policies indicates that, in practice, a large majority of countries adopt floating or managed-float regimes rather than strict fixed pegs or currency boards.
Option 1: 'Most central banks introduced currency board exchange rate regimes.' Currency boards are relatively rare and are not the predominant regime today; they are specific institutional arrangements used by only a subset of countries. This makes the statement inaccurate as a general description of current policy.
Option 2: 'Most countries introduce fixed exchange rate regimes.' Fixed regimes (including hard pegs) have diminished since the early 1990s, with many countries moving toward floats or managed floats. Thus this claim overstates fixed-rate prevalence in the modern era.
Option 3: 'Most countries use floating exchange rate regimes.' This aligns with observed global practice where many economies allow the currency value to be determined by market forces, sometimes with occasional intervention, which characterizes floating or managed-float regimes. It captures the prevailing tendency more accurately than the other options.
Option 4: 'Most central banks use combined exchange rate regimes.' While some central banks employ managed or hybrid approaches (a form of combination), saying that most use combined regimes exaggerates the proportion; the word 'combined' is ambiguous and does not reflect the mainstream categorization of floating vs fixed, making this statement less representative.
Option 5: 'Crawling peg exchange rate regime is mostly used nowadays.' Crawling pegs are a specific, relatively narrow mechanism and not the dominant regime globally; many countries either float or maintain other forms of managed flexibility rather than a crawling peg. This makes the assertion inaccurate as a general description.

econ_420_120255_249094 Lesson 15 Quiz

Among the statements below pick the one which best describes current policy of different countries central banks with respect to exchange rate regimes. Select one – the most appropriate answer.

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Similar Questions

Question17 An exchange rate regime where the domestic currency relative to a foreign currency is held within a defined band is termed as ______________. a pegged exchange rate a free float a managed float a fixed exchange rate a brokered exchange rate ResetMaximum marks: 1 Flag question undefined

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econ_420_120255_249094 Lesson 15 Quiz

Among the statements below pick the one which best describes current policy of different countries central banks with respect to exchange rate regimes. Select one – the most appropriate answer.

View Explanation

Log in for full answers

Similar Questions

Question17 An exchange rate regime where the domestic currency relative to a foreign currency is held within a defined band is termed as ______________. a pegged exchange rate a free float a managed float a fixed exchange rate a brokered exchange rate ResetMaximum marks: 1 Flag question undefined

Question5 An exchange rate regime where the domestic currency relative to a foreign currency is held within a defined band is termed as ______________. a managed float a free float a pegged exchange rate a brokered exchange rate a fixed exchange rate ResetMaximum marks: 1 Flag question undefined

Question4 An exchange rate regime where the domestic currency relative to a foreign currency is held within a defined band is termed as ______________. a free float a managed float a fixed exchange rate a brokered exchange rate a pegged exchange rate ResetMaximum marks: 1 Flag question undefined

A managed float exchange rate regime is best described as one in which:

How would you define a currency board?

The intersection of GG and LL for Norway determines

Why does the LL schedule have a negative slope? The economic stability loss from pegging to the area's currencies _______ as the degree of economic interdependence _______.

Question at position 24 A system in which currencies float against one another, with governments intervening to stabilize their currencies at particular target exchange rates is called a __.managed float systemlinked exchange-rate systemfree float systemfixed exchange-rate system

More Practical Tools for Students Powered by AI Study Helper

Making Your Study Simpler

Why does the LL schedule have a negative slope? The economic stability loss from pegging to the area's currencies _ as the degree of economic interdependence _.