A 'Pegged Exchange Rate' Is One in Which

Multiple Choice

A 'pegged exchange rate' is one in which:

A) the currency is backed by a fixed amount of gold.
B) demand and supply adjust so that there are no shortages or surpluses of currency in the market.
C) foreign exchange traders accept only a fixed price for their goods, regardless of the demand and supply for the currency.
D) the government defines its currency to be worth a certain amount in terms of another currency and ensures that the rate remains at that level.