GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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dual exchange rates
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crawling pegged exchange rates
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managed floating exchange rates
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adjustable pegged exchange rates
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Detailed explanation-1: -The ERM allows the central bank to tweak a currency peg in order to normalize trade and/or the influence of inflation. More broadly, ERM is used to keep exchange rates stable and minimize currency rate volatility in the market.
Detailed explanation-2: -A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency’s value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another measure of value, such as gold.
Detailed explanation-3: -Short-Run Exchange Rates Are Determined by Supply and Demand: Like any other price in local economies, exchange rates are determined by supply and demand-specifically the supply and demand for each currency.