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Unformatted text preview: C. governments can set exchange rates with fiscal policy. D. answers b) and c) are correct. 58. A currency board arrangement is A. when the currency of another country circulates as the sole legal tender. B. when the country belongs to a monetary or currency union in which the same legal tender is shared by the members of the union. C. a monetary regime based on an explicit legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate, combined with restrictions on the issuing authority to ensure the fulfillment of its legal obligation. D. where the country pegs its currency at a fixed rate to a major currency where the exchange rate fluctuates within a narrow margin of less than one percent. Topic: Current Exchange Rate Arrangements...
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- Spring '11
- Exchange Rate