When the Central Bank Adopts a Currency Board, It Is

Multiple Choice

When the central bank adopts a currency board, it is considered ______, because a shock to money demand _______.

A) a hard peg; can be covered at any level without a change in domestic credit
B) a soft peg; can be absorbed by a change in domestic credit
C) a reversion to floating rates; is impossible
D) the reinstatement of a gold standard; cannot be covered any other way