Answer: A currency board system
Explanation:
Currency board system is the national system of monetary authority that is responsible for issuing money, exchange of currency, conversion of currency etc.
This system can create monetary inflation if they restrict government for printing money to certain limit.
Other options are incorrect because managed-float system, European-monetary system and dirty-float system are not the system for money valuation in any nation.Thus, the correct option is currency-board system.
Answer:
Explanation
A monetary system in which a fixed exchange rate is maintained with a foreign currency.
In this system central bank is exempted from managing the exchange rate and money supply. Currency board maintains the reserves of the underlying currency.
In this system exchange rate and money supply is carried out by the currency board. The board evaluates national currency and can back it with foreign currency, if it decides to back all the national currency with foreign currency then it is known as hundred percent reserve requirement.
Its main disadvantage is that it doesn't allows the government to set the interest rates or print money. The interest rates are determined by a country's economic conditions
