contestada

A country wants to make sure that its economy remains stable. Its leaders
worry that allowing market forces to increase or decrease the value of the
country's currency could lead to instability and disrupt economic growth. As a
result, the country decides to tie the value of its currency directly to the U.S.
dollar. If the dollar becomes more valuable, the country's currency will
increase in value. If the dollar declines, the country's currency will decline as
well.
This economic situation is an example of a:
O A. flexible exchange rate.
Ο Ο Ο
O B. deficit-weighted exchange rate.
C. trade-weighted exchange rate.
D. fixed exchange rate.

Respuesta :

epicmadmax

Answer: D. Fixed Exchange rate

Explanation: The value of the currency changes with something else. In this case, the value it's going off of is the U.S. dollar. This could also be replaced with a gold standard.

If the value of a country's currency is tied to the value of the dollar, the country uses a fixed exchange rate.

What is a fixed exchange rate?

Exchange rate is the rate at which one currency is exchanged for another currency. When a country uses a fixed exchange rate is used, it means that the value of that country's currency is tied to the value of another country's currency or to the value of gold.

To learn more about exchange rate, please check: https://brainly.com/question/25780725

Otras preguntas